Is the United Football League done?
Friday, 29 July 2011 14:21
http://www.newjerseynewsroom.com/professional/is-the-united-football-league-done
BY EVAN WEINER
NEWJERSEYNEWSROOM.COM
THE BUSINESS AND POLITICS OF SPORTS
It probably has not been a good business year for the former Google executive Tim Armstrong. After leaving Google, Armstrong took over America Online and decided to put together a new football league called the United Football League. Armstrong's AOL is still floundering and is not in any better shape after Time Warner made the decision to jettison the one time gold standard in Internet service. The United Football League seems to be, using a boxing parlance, taking a standing eight count just awaiting the knockout blow.
The United Football League was heavily in debt when the 2010 season closed and has not cleared up the financial problems. The 2011 training camp season for the league's five teams has been postponed as has the league's planned August kickoff. There is a question of just how many teams will be on the field if there is a 2011 season.
Will Hartford field a team? As of Wednesday, the answer seemed to be yes, maybe, well maybe not. The United Football League has been, to say kindly, a work in progress since the announcement in 2007 that a group of well heeled, well connected investors including the husband of the Speaker of the House of Representatives, Paul Pelosi whose wife Nancy wielded the gavel in Washington, and Armstrong.
The league had a plan to start in 2008. The United Football League missed the target and began playing games in 2009. The present Hartford franchise was located in New York with the plan to use the Mets new baseball stadium in Queens named after a taxpayers bailed out bank who bought naming rights from Mets owner Fred Wilpon while the stadium was being planned and constructed.
Team owner William Mayer never did get a deal done with Wilpon and ended up playing one game at Giants Stadium in East Rutherford, NJ, one game at Hofstra's football stadium in Nassau County and one game in Hartford.
Mayer moved the team to Hartford in 2010 and found a local partner, the operators of the Hartford stadium, to invest in the team.
The league "expanded" to Virginia Beach, Virginia in late 2010 but the owner of the Hampton Bay area team, Jim Speros, got out and the league was stuck with an ownerless expansion team. Meanwhile the Orlando-based Florida Tuskers (partially owned by the Tampa Bay Rays Major League Baseball franchise owners) folded last January leaving five teams, Hartford, Las Vegas, Omaha, Sacramento and Virginia Beach. At the time Speros left and Orlando dropped out stories began to surface that the league was not paying some of the league and franchise bills including paying players for the championship game.
The UFL is supposed to be a development league not a National Football League competitor and players contracts with UFL teams in theory end with the UFL's championship game. But after the 2010 season, UFL officials wanted a payment from someone (the player, an NFL team) to release a player that had an opportunity to join an NFL team.
Armstrong had concluded a multimillion dollar deal with Arianna Huffington to combine the Huffington Post and AOL’s version of a newsroom. Meanwhile, they fired a lot of AOL writers and brought on the Huffington Post—a website that prides itself on not paying all of the writers at the time the stories about players not being paid started to leak.
The United Football League probably will be a case study one day in sports business management programs in colleges and universities in the United States. The league's apparent failure fits a narrative laid down by National Basketball Association Commissioner David Stern.
Stern's formula for being a successful league and franchise can be best explained by looking at a three legged stool. A stool needs three legs to be operational.
A league, a franchise, needs three components or legs to make it work. Government, a large cable TV contract (regional and national sports networks are placed on a bundled expanded tier with other cable TV networks and the consumer pays for all of those networks whether that consumer wants the network or not as part of the tier thanks to Congress and President Ronald Reagan's signature in 1984) and corporate support (buying luxury boxes and club seats and dining at venues and claiming going to games as a business expense and getting tax breaks under federal law).
The UFL apparently has failed on all three counts.
Armstrong and league officials had no leverage strong arming politicians in making demands for new stadiums and getting 92 cents of every dollar generated in the facility to flow back into the league or individual owners. Mayer used three stadiums in 2009 for the New York Sentinels and settled on Hartford.
Hartford is a problem for a league made up of mid-level American cities looking for a large local cable TV deal. The regional sports networks in New York and Boston probably would not be interested in Hartford games at a premium price although a couple of Colonials games ended up on the Boston Red Sox, Boston Bruins owned New England Sports Network. The same holds true for Comcast's Sacramento region sports network, or Comcast's Mid-Atlantic sports network or MASN in the Virginia Beach territory. Las Vegas is part of the Los Angeles regional sports channel’s reach and Omaha is not enough of a draw for any Midwest sports channel to pay big dollars.
The league played games all over the calendar and flew under the radar in terms of scheduling games on Friday night and Saturday during the fall. The NFL doesn't play on Friday nights or during the day and not on Saturdays during the high school and college football seasons in a trade off for an antitrust exemption for television purposes. The NFL never plays a regular season game on Friday nights and presents Saturday games starting in mid-December.
The league never was able to land a big national cable TV contract and there was little hope for a national over-the-air network to pay any sizeable rights fees for an entity which in 2009 was located in New York, Sacramento, Orlando and Las Vegas. Mark Cuban's HD Net and Comcast's Versus had television rights.
In 2010, Hartford, Las Vegas, Omaha, Orlando and Sacramento had teams. Again that really is not appealing in terms of national footprint.
The UFL wanted fans not customers and pushed the league as a good place to watch football at a fraction of the price of NFL tickets. That doesn't work anymore in the world of big time sports. Attendance was poor in many spots.
There have been many "rival" football leagues that tried to gain a piece of the professional marketplace. There were four versions of the American Football League. The second version of the American Football League featured the Cleveland Rams in 1936. The Rams franchise jumped to the NFL in 1937 (that franchise moved to Los Angeles in 1946, Anaheim in 1980 and St. Louis in 1995). The All American Football Conference lasted four years between 1946 and 1949. The NFL took three of the AAFC's franchises, the Cleveland Browns (another Cleveland franchise that ultimately failed and was moved by the owner Art Modell to Baltimore in 1996), the San Francisco 49ers and the Baltimore Colts (a franchise that went to New York in 1951, Dallas in 1952, back to Baltimore in 1953 and Indianapolis in 1984). AFL IV, which was bankrolled starting in 1965 by David Sarnoff’s NBC-TV, merged with the NFL in 1966 with the NFL taking all ten of the AFL's teams in 1970.
Other rivals perished.
The World Football League folded in 1975 after nearly a two-year run. The NFL moved the Pro Bowl to Hawaii after the WFL ended perhaps as a thank you to Hawaiian land developer Chris Hemmeter, the WFL owner who put the league out of business. The United States Football League had a three year go between 1983 and 1985. The USFL sued the NFL on antitrust grounds in a lawsuit headed by Donald Trump in 1986. The league won the lost suit (the battle) but Trump lost the war as a jury gave Trump's league a dollar in damages (apparently Trump's lead attorney Harvey Myerson did a great job getting the court win but messed up after the jury came back with a one dollar damage fee by not asking the jurors why they came up with the dollar figure while he had the opportunity).
Trump pushed the lawsuit while the NFL was looking for another solution which would have included taking two USFL franchises into the league. It was thought that Baltimore and Oakland (replacing two NFL franchises that moved to different cities) were the two markets the NFL wanted.
The NFL did not want Trump.
The International Football League and the Professional Spring Football League never got off the ground. In 2000, Bill Futterer's Spring Football League played a few games and then folded. Vince McMahon's spring time XFL was backed by General Electric's NBC network with dollars and exposure but the league folded shortly after the completion of the 2001 season. NBC Sports executive Ken Schanzer pulled the plug on McMahon and the XFL.
The XFL had a cable TV deal with TNN at the time and ESPN was allegedly very interested in the league for the 2002 season according to one prominent XFL official who still rues the day that Schanzer ended the XFL. According to that insider Schanzer didn't want a GE-NBC property on ESPN and he simply folded the league. The XFL would have been a cable only entity in 2002.
UFL officials knew the financial history of rival leagues and decided to test the marketplace for football in a crowded football environment in 2008 (just before the collapse of Lehman Brothers) in the worst economic downturn since the Great Depression. The UFL pulled back in 2008 and did not play until 2009. The league is supposed to announce plans for 2011 by August 15.
By that time only the owners, coaches, players and UFL personnel and their families will be the only ones caring if the league folds or plods through another year.
Evan Weiner, the winner of the United States Sports Academy's 2010 Ronald Reagan Media Award, is an author, radio-TV commentator and speaker on "The Politics of Sports Business." His book, "The Business and Politics of Sports, Second Edition" is available at bickley.com, Barnes and Noble or amazonkindle.
Friday, July 29, 2011
Tuesday, July 26, 2011
NFL is back and so is the business of football
TUESDAY, 26 JULY 2011 16:41
http://www.newjerseynewsroom.com/professional/the-nfl-is-back-and-so-is-the-business-of-football
BY EVAN WEINER
NEWJERSEYNEWSROOM.COM
THE BUSINESS AND POLITICS OF SPORTS
To the relief of a great many beers distributors, snack food vendors, per diem workers who are employed 10 days a year by NFL teams, fantasy football players, bookies, rather office pool organizers, casino operators in Nevada and those who cannot move from their couches for up to 12 hours at a time on Sunday because they are too busy watching football, the National Football League is back in business.
FOX's Rupert Murdoch, CBS' Sumner Redstone, General Electric's Jeffrey Immelt (NBC’s head prior to the Comcast takeover of the Peacock Network), The Walt Disney Company's Robert Iger and DirecTV executives don't have to explain to anyone including a federal judge in Minnesota why they were willing to underwrite the NFL owners lockout. Iger heads up Disney and one of Disney's companies is ESPN. That cable network would have put up money for the 2011 NFL season using subscribers’ money. Only about a tenth (and that is being generous) of ESPN subscribers watch football yet 100 percent pays and that is permissible thanks to the 1984 Cable TV legislation passed by Congress and signed into law by President Ronald Reagan. People who have no interest in the NFL would have helped support the owners lockout. That law allowed cable TV multiple systems operators to choose what networks they wanted on a basic expanded tier and sell them as one. The legislation probably saved ESPN, CNN, MTV and others from financial ruin.
The NFL owners lockout—which may have been prompted by some owners whose teams play in old facilities like New Jersey's Zygi Wilf's Minnesota Vikings who could not keep up with a salary floor—is over. It is unclear whether the new collective bargaining agreement will address that issue. With the end of the lockout, NFL owners can go back and demand new taxpayers assisted stadiums where needed. The NFL owners as part of the lockout ploy told the San Francisco 49ers ownership not to look for money to pay off the 49ers share of the costs a planned Santa Clara, California stadium because the league owners wanted the players to pay for part of the construction costs.
The players trade association, formerly known as the National Football League Players Association, never helped out broken down old players so it might have been a bit much to expect them to hand over money to owners to help build football facilities. The NFLPA didn't recognize in many cases that some of the retired players with very serious injuries that were sustained during their NFL careers ended up in government social safety nets long before their 65th birthdays such as Medicare and Social Security.
NFL owners and the NFLPA should have collectively bargained long term health care for players but that was not an important issue in the past for the NFLPA. The new CBA seems to have some provision to take care of the health of players but until the CBA is fully digested by all, including the retirees, it is unclear how much help those players may get.
The National Football League and by extension—the players—depends on government subsidies and handouts. The deal with the players is done and now it is time for the league to get new facilities in San Diego, Santa Clara, Oakland (the San Francisco Bay Area), Los Angeles, Minneapolis or Ramsey County, Minnesota and see what can be done with the Buffalo Bills franchise. Arthur Blank is seeking a new facility for his Atlanta Falcons franchise as 19 year old domed stadium that houses his team is quickly becoming antiquated and New York realtor Stephen Ross is stuck with a 24 year old, although updated, facility which is no longer suitable for a Super Bowl outside of Miami.
The mayor of Toronto, Rob Ford—who seems to fit in with the United States Tea Party movement in that he wants to slash services to the bone but not raise taxes for those who can afford a slight increase—may be open to finding public funding to build a National Football League state of the art facility in Canada's financial capital. Ford seems to be like a lot of politicians. Slash spending, cut public jobs and don't raise taxes on the very rich and if you can give the very rich tax breaks for sports facilities go for it. Political leaders in both parties in Minnesota are trying to build Wilf a taxpayers funded facility in some sort of public-private partnership. In Santa Clara, hundreds of millions of public dollars have been set aside for the 49ers planned facility. Louisiana is still giving New Orleans Saints owner Tom Benson cash handouts and New York is doing likewise for Buffalo's Ralph Wilson while cutting services. Florida politicians are seeking a way to help Ross and the NFL’s sad plight.
The 1986 changes in the tax code altered American sports. President Reagan's signature gave owners who played in taxpayers built facilities after 1986 an opportunity to get up to 92 cents on every dollar generated in the building with just as little as eight cents going to pay down the facility's debt. It was great news for owners and a massive expansion of American sports would ensue.
Since the changed occurred, the National Basketball Association has grown from 23 to 30 teams, Major League Baseball has added four teams and in 1990, Major League Baseball signed a new deal with minor league baseball operators which forced cities to renovate or build new minor league parks or risk losing the minor league team. The National Hockey League went from 21 to 30 teams and some franchises were relocated. The 28 team National Football league also expanded and ended up with 32 teams. Major League Soccer was formed and MLS owners are also at the public trough claiming their fair share of tax dollars for stadium construction.
The NFL expansion process started in 1991 and started a chain reaction of events that included creating four expansion teams (Carolina, Jacksonville, Cleveland and Hpuston) and the movement of the Anaheim-based Los Angeles Rams to St. Louis and Art Modell's Cleveland Browns to Baltimore. There was also the transfer of the Houston Oilers franchise to Nashville, Tennessee and Al Davis' Los Angeles Raiders to Oakland. The most eye opening franchise-government deal that evolved out of the 1991 expansion was the $186.5 million 2001 agreement between Louisiana and New Orleans Saints owner Tom Benson that assured Benson would keep his team in the Superdome even though he had an existing long term contract that bounded him to the building. Benson got $186.5 million from cash strapped Louisiana to stay in the city between 2002 and 2010.
In 1991, Baltimore, St. Louis, Memphis, Charlotte and Jacksonville decided to go after an NFL expansion franchise. The NFL never really expanded in the "modern" era (1956-present) because league owners like Chicago's George Halas, Pittsburgh's Art Rooney, and the Mara family's New York Giants had no inkling as to how to market and grow the NFL. Instead expansion was always a reaction to market pressures. When Lamar Hunt was unable to purchase the Chicago Cardinals or get an NFL expansion team in Dallas in 1959, he decided to start the American Football League. The NFL responded by expanding to Dallas and Minneapolis. In the mid-1960s, the NFL went into Atlanta to deny Hunt's league an opportunity to establish a team in that city. In 1966, the NFL granted New Orleans a franchise in exchange for Congressional approval of the AFL-NFL merger and in the 1970s, the NFL expanded to Seattle and Tampa to take potential markets out of circulation for the fledgling World Football League There was no outside pressure to expand in 1991 except there was money on the table and other owners could see what cities were willing to do to get an NFL team.
The NFL found out in a hurry that cities would be willing to pay a ransom for a team.
The league liked Charlotte and the possibility that a former player—Jerry Richardson—would own the franchise. Richardson didn't need much public money because the team was going to get ticket buyers to pay twice for seats and that would pay for the construction of the facility. Richardson's "personal seat licensing" scheme required ticket holders to buy a stadium seat over a set amount of years and then pay for a football game. NFL owners were impressed by the pricing mechanism and awarded Richardson a franchise but the NFL wanted two expansion teams and the 28 owners would split up $280 million with each owner getting a $10 million payment.
Boogie Weinglass and the author Tom Clancy pursued a Baltimore franchise. Weinglass presented a proposal that Maryland would build a stadium and the team would be well supported even though Robert Irsay moved out of the city in 1984 and NFL Commissioner Paul Tagliabue soured on the city that was more interested in building libraries than a football stadium.
"The problem was that the fans loved the (former team) Colts too much," said Weinglass in 1991. "And when we began to have the reverses (the team wasn't winning), they reacted very badly (attendance dropped) and the underlined feeling was that it was impossible that we would lose the team. In fact we did.
"They (the owners) said that it wasn't a factor (the team moving)."
Weinglass was competing with two other Baltimore groups for the franchise. They all failed but the Baltimore/Maryland stadium bid was circulated within the NFL. Baltimore was offering a stadium complete with the requisite state of the art luxury boxes, club seats, restaurants, concessions with major revenue streams. The stadium would be paid through a combination of municipal resources including proceeds from the Maryland lottery.
The NFL said no to an expansion team but the terms of the Maryland deal was too good for Art Modell to pass up. In 1995, Modell took the offer (which included a multi-million loan to Modell) and made Weinglass a bit of a prophet.
"The fact of the matter is, the primary basis the league is going to make its decision is what city can make the most money for the league and I think Baltimore can make more money for the league than any other town (in 1991, Memphis, Jacksonville, St. Louis and Charlotte),” said Weinglass. “ (Baltimore) is a bigger city. It's bigger than Charlotte, bigger than San Antonio (which wasn't a serious bidder), we have done all the surveys that show we can fill a 70,000 seat stadium, we have a great big television market, one of the biggest in America. We got all the buttons pushed."
Baltimore has succeeded despite the fact that the market is surrounded by Philadelphia and Washington. The team is looking to expand market share and co-exist with the Redskins in a shared market status like the Giants and Jets in New York and the 49ers and Raiders in the San Francisco Bay Area market. Because of NFL rules not every Ravens game is seen on Washington TV which is 40 miles away nor is every Redskins game is shown on Baltimore TV.
Redskins and Ravens ownership would like to get same market status which would include no scheduling of home games at the same time in both cities. Major League Baseball has given Baltimore and Washington same market status and the United States Olympic Committee considered Baltimore-Washington one market in the bidding for the 2012 Summer Olympics.
It was thought that NFL marketing partner Anheuser Busch would be the deciding factor in St. Louis landing an expansion franchise in 1993. That was a concern for other bidders given AB's cozy relationship with the city of St. Louis and the NFL. But St. Louis was a failed NFL market. Bill Bidwill left town after the 1987 football season and went to Tempe, Arizona. That was a black mark against the city because St. Louis refused to build Bidwill a new football facility. After Bidwill left, Missouri, St. Louis County and the city of St. Louis socked away $258 million for a 70,000 seat domed football facility. The city was willing to help pay some of the costs for an expansion team. Some of the money was going to come from a motel-hotel sales tax hike.
"Central to our application was the stadium," said Jerry Clinton. "The others things that are naturally inherent are the size of our television market. We are the 18th largest TV market in the country. Our market is larger than 35 percent of the markets that currently possess National Football League teams. The, of course, all those things we inherit because of our location and population. We are nearly two a half million people, our location is exactly the population center of the United States, we are accessible, we fit expansion and division realignment in any direction, north, south, east or west, we are always compatible with NFC or AFC plans. On top of them we have a very solid ownership with Walter Payton and Jim Orthwein (the great grandson of AB's founder Adolphus Busch). I think that has to be considered very heavily too.”
Anheuser Busch didn't have much sway over the NFL owners. St. Louis failed. Charlotte was an area that the league really wanted and got the 29th franchise. But number 30 was a fight between Baltimore, St. Louis and Jacksonville. Memphis was not seriously considered.
Wayne Weaver got involved in the Jacksonville bid before the NFL solicited interested people in what amounted to an auction for two franchises. Jacksonville was looked upon as a huge growth city by football people including Robert Irsay who thought about moving his Baltimore Colts to the town as well as Houston's Bud Adams. Neither did but Jacksonville remained attractive.
"We had our mayor with us, Mayor Ed Austin," said Weaver knowing that political support was a major component of any bid back in 1991. "We had our city council president, Warren Jones, we had the gentleman who will renovate our Gator Bowl, the biggest contractor in the southeastern United States, Preston Haskell, and our president David Seldin.
"We have three qualities that we think we set us apart from the other candidate cities and that's what we talked about today. We think we have the best football fans in America. The second thing we talked about and what sets us apart from the competing candidate cities is that we have the only game in town. We have no competition from other major league franchises. I am not sure anybody can make that statement. We have no competition from college sports which Memphis has. We have no competition from other major league franchises and we think the only game in town aspect is an important ingredient. Finally and most importantly was the local ownership group issue. We have the financial credentials to qualify for an NFL expansion team and we made that very clear."
"It is very true that Florida is a very proactive sports state. One of the presenters today (in 1991) in our video is Governor Lawton Chiles, he is truly a supporter of NFL football in Jacksonville. Jacksonville is Florida's city of choice for the NFL. Simply put, the state of Florida is a partner in this quest. The state legislature has put together legislation that encourages and financially supports stadiums for sports in the state of Florida. The (baseball) Marlins are the latest example. We think Jacksonville will be the latest example of why we can compete because we have, among other things, the state of Florida as a financial partner. There are no tax dollars involved, it is a sales tax abatement there is no general revenue taxes involved in the state of Florida."
Jacksonville won the race and got a franchise. But it has been very tough sledding in recent years with rumors that Weaver is ready to pick up and move elsewhere. The stadium seating capacity has been cut and the rough northern Florida economy is not helping the franchise. Still Weaver has made it clear he wants to remain in Jacksonville. But Los Angeles interests have targeted Weaver and plan to try and entice him to move.
Neither Los Angeles nor Anaheim has had an NFL team since the end of the 1994 season. Georgia Frontiere did her 15 years in Anaheim and when a better stadium deal did not develop, she opted to take the St. Louis offer that was still on the table after the NFL gave Charlotte and Jacksonville teams. Raiders owner Al Davis could have had the LA market to himself but negotiations between the NFL, Davis and Hollywood Park racetrack in Inglewood broke down after a deal looked to be coming together.
Davis and the league were going to be what can best be described as partners in the deal. The NFL would award the stadium five Super Bowls in 10 years to get back some of the money Davis and the league were going to put up for the facility. Davis would get revenues from luxury boxes, club seats and concessions. But the NFL decided that five Super Bowls in 10 years was too much for LA and scaled back to three and then just one. Davis would only be the sole tenant for one year with another team moving in and sharing revenues from luxury boxes, club seats and concessions. Those were deal breakers and Davis moved back to Oakland. The NFL is more responsible for having no team in LA than Al Davis.
The LA area lost both teams but unlike Cleveland, they didn’t threaten to sue and replace a team. The NFL expanded into Cleveland after getting a deal done for a new stadium and the new Cleveland Browns started play in 1999. Los Angeles was given a 2002 condition expansion franchise if a stadium was built. There was no available funding for a building like Houston had, so the NFL gave the fourth expansion team to Bob McNair and Houston.
Davis is looking for a new stadium deal as Oakland has not been a panacea for the team money-wise. His Oakland deal is up after 2013.
Los Angeles' Anschutz Entertainment Group (AEG) has told LA city officials they better sign off on a deal to help finance a new football stadium by July 31 and cash strapped Los Angeles seems to be ready to make a deal.
AEG has a list of targeted owners including Stan Kroenke who has the St. Louis Rams. There was a provision in the Georgia Frontiere-St. Louis 20 year contract (which is done in 2014) that probably will come back and haunt the city, county and state. The Rams franchise has to be in the upper quarter or top eight in stadium revenue generation. A 20-year-old facility cannot compete with new places like the New Meadowlands Stadium or Jerry Jones' Dallas Cowboys Stadium in Arlington, Texas. St. Louis may run into the Louisiana problem of 1999 and 2000 when Benson complained that the Superdome was no longer in the top 4 of NFL revenue generators and had fallen to the bottom and needed help or he would have to move.
Ironically it was new stadiums in St. Louis, Jacksonville and Baltimore that helped cause Benson's woes. The new stadiums were cash cows for owners; those owners spent money for scouting staffs and coaches. Baltimore and St. Louis won Super Bowls; Jacksonville was a Super Bowl contender. Benson went to the state house in Baton Rouge and find willing partners in both houses of the legislature and Governor Mike Foster. The Rams franchise may need a handout or might be available for some new facility in 2015.
The NFL is back, although it never went anywhere. No games were missed, the three day draft was held in April and people had to pay for their seats on time or risk losing them. That's the way NFL business operates and the business operations will soon be on display in Santa Clara, Oakland, Los Angeles, San Diego, Toronto, St. Paul, Minnesota and maybe in Jacksonville, South Florida, Atlanta and Buffalo with one certainty: the billionaire owners will be looking for tax breaks for their football businesses which really don't do all that much for the economy.
Evan Weiner, the winner of the United States Sports Academy's 2010 Ronald Reagan Media Award, is an author, radio-TV commentator and speaker on "The Politics of Sports Business." His book, "The Business and Politics of Sports, Second Edition" is available at bickley.com, Barnes and Noble or amazonkindle.
TUESDAY, 26 JULY 2011 16:41
http://www.newjerseynewsroom.com/professional/the-nfl-is-back-and-so-is-the-business-of-football
BY EVAN WEINER
NEWJERSEYNEWSROOM.COM
THE BUSINESS AND POLITICS OF SPORTS
To the relief of a great many beers distributors, snack food vendors, per diem workers who are employed 10 days a year by NFL teams, fantasy football players, bookies, rather office pool organizers, casino operators in Nevada and those who cannot move from their couches for up to 12 hours at a time on Sunday because they are too busy watching football, the National Football League is back in business.
FOX's Rupert Murdoch, CBS' Sumner Redstone, General Electric's Jeffrey Immelt (NBC’s head prior to the Comcast takeover of the Peacock Network), The Walt Disney Company's Robert Iger and DirecTV executives don't have to explain to anyone including a federal judge in Minnesota why they were willing to underwrite the NFL owners lockout. Iger heads up Disney and one of Disney's companies is ESPN. That cable network would have put up money for the 2011 NFL season using subscribers’ money. Only about a tenth (and that is being generous) of ESPN subscribers watch football yet 100 percent pays and that is permissible thanks to the 1984 Cable TV legislation passed by Congress and signed into law by President Ronald Reagan. People who have no interest in the NFL would have helped support the owners lockout. That law allowed cable TV multiple systems operators to choose what networks they wanted on a basic expanded tier and sell them as one. The legislation probably saved ESPN, CNN, MTV and others from financial ruin.
The NFL owners lockout—which may have been prompted by some owners whose teams play in old facilities like New Jersey's Zygi Wilf's Minnesota Vikings who could not keep up with a salary floor—is over. It is unclear whether the new collective bargaining agreement will address that issue. With the end of the lockout, NFL owners can go back and demand new taxpayers assisted stadiums where needed. The NFL owners as part of the lockout ploy told the San Francisco 49ers ownership not to look for money to pay off the 49ers share of the costs a planned Santa Clara, California stadium because the league owners wanted the players to pay for part of the construction costs.
The players trade association, formerly known as the National Football League Players Association, never helped out broken down old players so it might have been a bit much to expect them to hand over money to owners to help build football facilities. The NFLPA didn't recognize in many cases that some of the retired players with very serious injuries that were sustained during their NFL careers ended up in government social safety nets long before their 65th birthdays such as Medicare and Social Security.
NFL owners and the NFLPA should have collectively bargained long term health care for players but that was not an important issue in the past for the NFLPA. The new CBA seems to have some provision to take care of the health of players but until the CBA is fully digested by all, including the retirees, it is unclear how much help those players may get.
The National Football League and by extension—the players—depends on government subsidies and handouts. The deal with the players is done and now it is time for the league to get new facilities in San Diego, Santa Clara, Oakland (the San Francisco Bay Area), Los Angeles, Minneapolis or Ramsey County, Minnesota and see what can be done with the Buffalo Bills franchise. Arthur Blank is seeking a new facility for his Atlanta Falcons franchise as 19 year old domed stadium that houses his team is quickly becoming antiquated and New York realtor Stephen Ross is stuck with a 24 year old, although updated, facility which is no longer suitable for a Super Bowl outside of Miami.
The mayor of Toronto, Rob Ford—who seems to fit in with the United States Tea Party movement in that he wants to slash services to the bone but not raise taxes for those who can afford a slight increase—may be open to finding public funding to build a National Football League state of the art facility in Canada's financial capital. Ford seems to be like a lot of politicians. Slash spending, cut public jobs and don't raise taxes on the very rich and if you can give the very rich tax breaks for sports facilities go for it. Political leaders in both parties in Minnesota are trying to build Wilf a taxpayers funded facility in some sort of public-private partnership. In Santa Clara, hundreds of millions of public dollars have been set aside for the 49ers planned facility. Louisiana is still giving New Orleans Saints owner Tom Benson cash handouts and New York is doing likewise for Buffalo's Ralph Wilson while cutting services. Florida politicians are seeking a way to help Ross and the NFL’s sad plight.
The 1986 changes in the tax code altered American sports. President Reagan's signature gave owners who played in taxpayers built facilities after 1986 an opportunity to get up to 92 cents on every dollar generated in the building with just as little as eight cents going to pay down the facility's debt. It was great news for owners and a massive expansion of American sports would ensue.
Since the changed occurred, the National Basketball Association has grown from 23 to 30 teams, Major League Baseball has added four teams and in 1990, Major League Baseball signed a new deal with minor league baseball operators which forced cities to renovate or build new minor league parks or risk losing the minor league team. The National Hockey League went from 21 to 30 teams and some franchises were relocated. The 28 team National Football league also expanded and ended up with 32 teams. Major League Soccer was formed and MLS owners are also at the public trough claiming their fair share of tax dollars for stadium construction.
The NFL expansion process started in 1991 and started a chain reaction of events that included creating four expansion teams (Carolina, Jacksonville, Cleveland and Hpuston) and the movement of the Anaheim-based Los Angeles Rams to St. Louis and Art Modell's Cleveland Browns to Baltimore. There was also the transfer of the Houston Oilers franchise to Nashville, Tennessee and Al Davis' Los Angeles Raiders to Oakland. The most eye opening franchise-government deal that evolved out of the 1991 expansion was the $186.5 million 2001 agreement between Louisiana and New Orleans Saints owner Tom Benson that assured Benson would keep his team in the Superdome even though he had an existing long term contract that bounded him to the building. Benson got $186.5 million from cash strapped Louisiana to stay in the city between 2002 and 2010.
In 1991, Baltimore, St. Louis, Memphis, Charlotte and Jacksonville decided to go after an NFL expansion franchise. The NFL never really expanded in the "modern" era (1956-present) because league owners like Chicago's George Halas, Pittsburgh's Art Rooney, and the Mara family's New York Giants had no inkling as to how to market and grow the NFL. Instead expansion was always a reaction to market pressures. When Lamar Hunt was unable to purchase the Chicago Cardinals or get an NFL expansion team in Dallas in 1959, he decided to start the American Football League. The NFL responded by expanding to Dallas and Minneapolis. In the mid-1960s, the NFL went into Atlanta to deny Hunt's league an opportunity to establish a team in that city. In 1966, the NFL granted New Orleans a franchise in exchange for Congressional approval of the AFL-NFL merger and in the 1970s, the NFL expanded to Seattle and Tampa to take potential markets out of circulation for the fledgling World Football League There was no outside pressure to expand in 1991 except there was money on the table and other owners could see what cities were willing to do to get an NFL team.
The NFL found out in a hurry that cities would be willing to pay a ransom for a team.
The league liked Charlotte and the possibility that a former player—Jerry Richardson—would own the franchise. Richardson didn't need much public money because the team was going to get ticket buyers to pay twice for seats and that would pay for the construction of the facility. Richardson's "personal seat licensing" scheme required ticket holders to buy a stadium seat over a set amount of years and then pay for a football game. NFL owners were impressed by the pricing mechanism and awarded Richardson a franchise but the NFL wanted two expansion teams and the 28 owners would split up $280 million with each owner getting a $10 million payment.
Boogie Weinglass and the author Tom Clancy pursued a Baltimore franchise. Weinglass presented a proposal that Maryland would build a stadium and the team would be well supported even though Robert Irsay moved out of the city in 1984 and NFL Commissioner Paul Tagliabue soured on the city that was more interested in building libraries than a football stadium.
"The problem was that the fans loved the (former team) Colts too much," said Weinglass in 1991. "And when we began to have the reverses (the team wasn't winning), they reacted very badly (attendance dropped) and the underlined feeling was that it was impossible that we would lose the team. In fact we did.
"They (the owners) said that it wasn't a factor (the team moving)."
Weinglass was competing with two other Baltimore groups for the franchise. They all failed but the Baltimore/Maryland stadium bid was circulated within the NFL. Baltimore was offering a stadium complete with the requisite state of the art luxury boxes, club seats, restaurants, concessions with major revenue streams. The stadium would be paid through a combination of municipal resources including proceeds from the Maryland lottery.
The NFL said no to an expansion team but the terms of the Maryland deal was too good for Art Modell to pass up. In 1995, Modell took the offer (which included a multi-million loan to Modell) and made Weinglass a bit of a prophet.
"The fact of the matter is, the primary basis the league is going to make its decision is what city can make the most money for the league and I think Baltimore can make more money for the league than any other town (in 1991, Memphis, Jacksonville, St. Louis and Charlotte),” said Weinglass. “ (Baltimore) is a bigger city. It's bigger than Charlotte, bigger than San Antonio (which wasn't a serious bidder), we have done all the surveys that show we can fill a 70,000 seat stadium, we have a great big television market, one of the biggest in America. We got all the buttons pushed."
Baltimore has succeeded despite the fact that the market is surrounded by Philadelphia and Washington. The team is looking to expand market share and co-exist with the Redskins in a shared market status like the Giants and Jets in New York and the 49ers and Raiders in the San Francisco Bay Area market. Because of NFL rules not every Ravens game is seen on Washington TV which is 40 miles away nor is every Redskins game is shown on Baltimore TV.
Redskins and Ravens ownership would like to get same market status which would include no scheduling of home games at the same time in both cities. Major League Baseball has given Baltimore and Washington same market status and the United States Olympic Committee considered Baltimore-Washington one market in the bidding for the 2012 Summer Olympics.
It was thought that NFL marketing partner Anheuser Busch would be the deciding factor in St. Louis landing an expansion franchise in 1993. That was a concern for other bidders given AB's cozy relationship with the city of St. Louis and the NFL. But St. Louis was a failed NFL market. Bill Bidwill left town after the 1987 football season and went to Tempe, Arizona. That was a black mark against the city because St. Louis refused to build Bidwill a new football facility. After Bidwill left, Missouri, St. Louis County and the city of St. Louis socked away $258 million for a 70,000 seat domed football facility. The city was willing to help pay some of the costs for an expansion team. Some of the money was going to come from a motel-hotel sales tax hike.
"Central to our application was the stadium," said Jerry Clinton. "The others things that are naturally inherent are the size of our television market. We are the 18th largest TV market in the country. Our market is larger than 35 percent of the markets that currently possess National Football League teams. The, of course, all those things we inherit because of our location and population. We are nearly two a half million people, our location is exactly the population center of the United States, we are accessible, we fit expansion and division realignment in any direction, north, south, east or west, we are always compatible with NFC or AFC plans. On top of them we have a very solid ownership with Walter Payton and Jim Orthwein (the great grandson of AB's founder Adolphus Busch). I think that has to be considered very heavily too.”
Anheuser Busch didn't have much sway over the NFL owners. St. Louis failed. Charlotte was an area that the league really wanted and got the 29th franchise. But number 30 was a fight between Baltimore, St. Louis and Jacksonville. Memphis was not seriously considered.
Wayne Weaver got involved in the Jacksonville bid before the NFL solicited interested people in what amounted to an auction for two franchises. Jacksonville was looked upon as a huge growth city by football people including Robert Irsay who thought about moving his Baltimore Colts to the town as well as Houston's Bud Adams. Neither did but Jacksonville remained attractive.
"We had our mayor with us, Mayor Ed Austin," said Weaver knowing that political support was a major component of any bid back in 1991. "We had our city council president, Warren Jones, we had the gentleman who will renovate our Gator Bowl, the biggest contractor in the southeastern United States, Preston Haskell, and our president David Seldin.
"We have three qualities that we think we set us apart from the other candidate cities and that's what we talked about today. We think we have the best football fans in America. The second thing we talked about and what sets us apart from the competing candidate cities is that we have the only game in town. We have no competition from other major league franchises. I am not sure anybody can make that statement. We have no competition from college sports which Memphis has. We have no competition from other major league franchises and we think the only game in town aspect is an important ingredient. Finally and most importantly was the local ownership group issue. We have the financial credentials to qualify for an NFL expansion team and we made that very clear."
"It is very true that Florida is a very proactive sports state. One of the presenters today (in 1991) in our video is Governor Lawton Chiles, he is truly a supporter of NFL football in Jacksonville. Jacksonville is Florida's city of choice for the NFL. Simply put, the state of Florida is a partner in this quest. The state legislature has put together legislation that encourages and financially supports stadiums for sports in the state of Florida. The (baseball) Marlins are the latest example. We think Jacksonville will be the latest example of why we can compete because we have, among other things, the state of Florida as a financial partner. There are no tax dollars involved, it is a sales tax abatement there is no general revenue taxes involved in the state of Florida."
Jacksonville won the race and got a franchise. But it has been very tough sledding in recent years with rumors that Weaver is ready to pick up and move elsewhere. The stadium seating capacity has been cut and the rough northern Florida economy is not helping the franchise. Still Weaver has made it clear he wants to remain in Jacksonville. But Los Angeles interests have targeted Weaver and plan to try and entice him to move.
Neither Los Angeles nor Anaheim has had an NFL team since the end of the 1994 season. Georgia Frontiere did her 15 years in Anaheim and when a better stadium deal did not develop, she opted to take the St. Louis offer that was still on the table after the NFL gave Charlotte and Jacksonville teams. Raiders owner Al Davis could have had the LA market to himself but negotiations between the NFL, Davis and Hollywood Park racetrack in Inglewood broke down after a deal looked to be coming together.
Davis and the league were going to be what can best be described as partners in the deal. The NFL would award the stadium five Super Bowls in 10 years to get back some of the money Davis and the league were going to put up for the facility. Davis would get revenues from luxury boxes, club seats and concessions. But the NFL decided that five Super Bowls in 10 years was too much for LA and scaled back to three and then just one. Davis would only be the sole tenant for one year with another team moving in and sharing revenues from luxury boxes, club seats and concessions. Those were deal breakers and Davis moved back to Oakland. The NFL is more responsible for having no team in LA than Al Davis.
The LA area lost both teams but unlike Cleveland, they didn’t threaten to sue and replace a team. The NFL expanded into Cleveland after getting a deal done for a new stadium and the new Cleveland Browns started play in 1999. Los Angeles was given a 2002 condition expansion franchise if a stadium was built. There was no available funding for a building like Houston had, so the NFL gave the fourth expansion team to Bob McNair and Houston.
Davis is looking for a new stadium deal as Oakland has not been a panacea for the team money-wise. His Oakland deal is up after 2013.
Los Angeles' Anschutz Entertainment Group (AEG) has told LA city officials they better sign off on a deal to help finance a new football stadium by July 31 and cash strapped Los Angeles seems to be ready to make a deal.
AEG has a list of targeted owners including Stan Kroenke who has the St. Louis Rams. There was a provision in the Georgia Frontiere-St. Louis 20 year contract (which is done in 2014) that probably will come back and haunt the city, county and state. The Rams franchise has to be in the upper quarter or top eight in stadium revenue generation. A 20-year-old facility cannot compete with new places like the New Meadowlands Stadium or Jerry Jones' Dallas Cowboys Stadium in Arlington, Texas. St. Louis may run into the Louisiana problem of 1999 and 2000 when Benson complained that the Superdome was no longer in the top 4 of NFL revenue generators and had fallen to the bottom and needed help or he would have to move.
Ironically it was new stadiums in St. Louis, Jacksonville and Baltimore that helped cause Benson's woes. The new stadiums were cash cows for owners; those owners spent money for scouting staffs and coaches. Baltimore and St. Louis won Super Bowls; Jacksonville was a Super Bowl contender. Benson went to the state house in Baton Rouge and find willing partners in both houses of the legislature and Governor Mike Foster. The Rams franchise may need a handout or might be available for some new facility in 2015.
The NFL is back, although it never went anywhere. No games were missed, the three day draft was held in April and people had to pay for their seats on time or risk losing them. That's the way NFL business operates and the business operations will soon be on display in Santa Clara, Oakland, Los Angeles, San Diego, Toronto, St. Paul, Minnesota and maybe in Jacksonville, South Florida, Atlanta and Buffalo with one certainty: the billionaire owners will be looking for tax breaks for their football businesses which really don't do all that much for the economy.
Evan Weiner, the winner of the United States Sports Academy's 2010 Ronald Reagan Media Award, is an author, radio-TV commentator and speaker on "The Politics of Sports Business." His book, "The Business and Politics of Sports, Second Edition" is available at bickley.com, Barnes and Noble or amazonkindle.
Friday, July 22, 2011
Baseball Hall of Fame is incomplete without Curt Flood and Marvin Miller
Thursday, 21 July 2011 16:49
http://www.newjerseynewsroom.com/professional/baseball-hall-of-fame-is-incomplete-without-curt-flood-and-marvin-miller
BY EVAN WEINER
NEWJERSEYNEWSROOM.COM
THE BUSINESS AND POLITICS OF SPORTS
There will be a few new plaques hanging in the Baseball Hall of Fame in Cooperstown, New York as of this weekend but the baseball equivalent of the Smithsonian really is not a complete museum. Unlike the basketball shrine in Springfield, Massachusetts (which included Larry Fleischer who was the first Executive Director of the National Basketball Players Association as a builder) and the hockey Valhalla in Toronto, Ontario (a museum which inducted Alan Eagleson who founded the National Hockey League Players Association until he was booted for illegal activities), the Cooperstown museum has no room for perceived enemies of baseball like Marvin Miller, the founder of the Major League Baseball Players Association or Curt Flood who challenged baseball's reserve clause. Miller and Flood were major contributors to the game but perhaps they did it in a negative way. Cooperstown does honor two-bit baseball scribes for their contributions for providing baseball propaganda and inducts them into a special wing very year.
Miller just missed being elected into the Cooperstown shrine this year. Apparently there are still resentments from certain segments of baseball that linger. Flood has never been considered a serious candidate for an inclusion as a player.
Roberto Alomar and Bert Blyleven were voted into the Hall of Fame by baseball's ultimate sycophants--the Baseball Writers of America- last winter. Pat Gillick, a former General Manager whose stops included a stint with the Philadelphia Phillies was voted in by the veteran's committee. This year's winner of the writer's award goes to Bill Conlin who worked in Philadelphia. Roland Hemond got the Buck O'Neill lifetime achievement award and one time Montreal Expos and Florida Marlins announcer Dave Van Horne gets the announcers award.
Flood challenged the reserve clause which used to literally bind players in perpetuity to a club until the player was deemed by a general manager to be unnecessary.
"Evan, I am so pleased you said that,' was Curt Flood's response to a question back in the early 1990s when asked about the baseball fan's joy of the winter meetings--which is a meat market for baseball teams who trade human beings for others in the hopes that the teams will improve and yet forget that they trade a human being.” You know you kind of have that feeling many many times that at this huge conference table, these wonderful men sit in front of all these contracts and like cards they deal them out, you know.
"You want a shortstop, you want a shortstop, here's a shortstop and unfortunately every time you move a piece of paper and I want you to think about it now. Every time you move one piece of paper from this seat in front of someone else, Mrs. Flood has to find a new school, a new apartment, a new set of friends. Mrs. Flood has to find a new neighborhood. Enormous things happen when you move one player from one town to another when you trade or sell him.
"Sometimes the owners lose sight of that."
Curt Flood was a really good baseball player who began his career in 1956 with the Cincinnati Redlegs (the franchise owners for some reason lengthened the name from the Reds to Redlegs in the 1950s partially in response to America's "anti-Red", anti-communist mood with the Reds name removed from the logo. The name Reds would return in the 1960s). He played some games with Cincinnati and was traded during the December 1957 winter meetings to St. Louis.
Flood spent 12 years in St. Louis and was dealt on October 7, 1969 to Philadelphia along with Tim McCarver, Byron Browne and Joe Horner for Dick Allen, Cookie Rojas and Jerry Johnson. It was on October 7, 1969 that life would not only change for Flood and the other players involved in the deal but the baseball industry as a whole.
Flood refused to report to Philadelphia for a variety of reasons.
"I think it was a decision that came over many, many years of subtle abuses that people under contract have to live with," he explained. "It seems that when a handful of men own the industry, advantages are taking of the employees that under no other circumstances would you sit still for. That was true in baseball before we had the chance to really seriously negotiate the rest of our lives and I guess over the years and over a period of time where I saw men being traded while they drove to the ballpark and they heard on the radio that they no longer worked for the team that they were going to get ready to go suit up for, they were traded in between doubleheaders, they were traded or sold for one reason or another, after enduring that with a lot of my friends, I'd often wonder what the heck would happen if it even happened to me.
"And in 1969 that happened and after great successes in St. Louis, one of the, I can't call them underling, but it certainly wasn't Mr. (Gussie) Busch, the owner, called me on the phone one morning and said hi Curt, you know you have been traded. You know, that was probably the most important conversation in my lifetime and sure as check, the next day, a messenger delivered an envelope with an index sized card in it and it said 'Dear" and someone types your name in, you have been and there are five possibilities. You might not know that. You could have been sold, traded, optioned or whatever, outright, right and traded was checked.
"In the 13 years in St. Louis, I don't know. I think on top of all of the other situations that I saw happen over my career span that had to be the last kick in the pants that baseball wanted to give me."
Flood was a very good player and had won seven Gold Gloves as the best centerfielder in the National League between 1963 and 1969. He hit .300 or better six times and set defensive records for a centerfielder. He was part of two St. Louis Cardinals World Series championships and was co-captain of the team. But his relationship with Busch and the Cardinals had fallen apart by 1969. One reason? He asked for $100,000 which in those days was given to just a few players like Willie Mays, Mickey Mantle and Flood’s one time Cardinals teammate Stan Musial.
"I guess a week went by before you say to yourself, this is not a joke, this is serious. You no longer work here. And I guess about a week and I talked to Alan Zerman, who was my attorney then in St. Louis. He said Curt, you know baseball has been doing this to men for 200 years and you are just part of the machinery and there is very little you can do about it. You can challenge this if you want to and it started to germinate then that something illegal had been done to me.
"Something almost inhumane had been done to me. It kind of snowballed from there."
Curt Flood never did report to Philadelphia and filed a lawsuit against Major League Baseball Commissioner Bowie Kuhn in January 1970 contending that Major League Baseball had committed an antitrust violation. Flood made $90,000 in 1969 and gave up a $100,000 deal to play for the Phillies in 1970. Instead Flood became immersed in learning about the Sherman Antitrust Act and baseball's history with the legal system. Marvin Miller and the Major League Baseball Players Association picked up Flood's legal bills.
"I learned a lot about the law system," Flood said. "And how it operates. I guess not playing that one year, it is necessary to be damaged in that one year and that would have done that. As I thought about it later on, I wished I had not played that one year in 1971 (with the Washington Senators) and the only thing that made me do it was (manager) Ted Williams, I love him. He was going to manage in Washington and he called me. I was in Denmark and he called up and said can I come up and see you. I thought he was down in the lobby. He said no I am in Washington. He said I will meet you halfway. So him (Senators owner Robert Short), they were both on the phone together and he said, no, no, I am not in the lobby. First of all, Robert Short said I got some guys on this team, I don't know if they can play baseball or not but I know you can and I will send you a contract, you sign it and you fill it in. Hohohoho, now you are talking.
"I said Mr. Short, you know the situation, you know the problems we are having with the reserve clause, all this thing is being litigated now in New York. He said they talked to Arthur Goldberg who then was my attorney, Justice Goldberg said that whatever decision the Supreme Court had made it, it already decided and there is nothing you can do short of jumping off a building, unquote, that would change their mind. So I did, I called Justice Goldberg and Marvin Miller and they said if you want to play again, I don't think there is anything you can do to hurt your case.
"How many times can you turn down $150,000 a year?
"Once there may I tell you.
"So they gave me the opportunity to play again and I wasn't going to turn that down. I'm a nice guy; I think I deserved to play for the Senators."
But Flood was busy litigating in 1970 and the baseball inactivity took its toll on the then 33-year old Flood in 1971. He retired after just 13 games with Washington.
"Seventy was like a long winter. You were always expect that at any moment you were going to go back to (the St. Louis Cardinals spring training site) St. Petersburg (Florida) and start what you really do for a living. After a while all of this kind of settles in and your mind accepts that you are no longer a baseball player," he recalled. "But I spent most of 1970 in Denmark, in Copenhagen, in a little place called Vivek where these wonderful nice Danish people would say what do you do for a living? I'm a baseball player. They would say no no no what do you do? I’m a baseball player.
"How do you feed your family?' he laughed.”They know so little about baseball that you could travel in circles where you could have complete anonymity which delighted me. So, it was not easy.
"It was getting over, cold turkey, something you have done every year for almost 15 years. It wasn't easy. 1970 was not an easy year."
Ultimately the Supreme Court of the United States ruled against Flood and his challenge of Baseball's reserve clause. Baseball had won again in the Supreme Court. In 1922, the National and the American Leagues got a favorable ruling in a lawsuit filed by the owners of the Baltimore team in the Federal League which provided the leagues with protection from the country's antitrust laws.
"I was flabbergasted because I am an American and I thought like an American and I thought that everyone could see that baseball players were getting the short end of a very short stick," Flood said more than two decades after the decision.
"However I was trying to explain this to men who would give their first born child to wear this uniform for a minute. Just let me touch it, you know, for me to tell them in this culture look at you how you too would have loved to have worn that uniform for me to say there is something wrong in baseball is like defiling the flag.
"The Supreme Court, I guess they felt the same way that being a baseball player is the best of all worlds and I ought to sit down someplace and shut up. The Supreme Court did not say that, they said they were going to leave this decision to someone else."
That someone else would be an arbitrator named Peter Seitz who ruled against baseball's reserve clause in 1975 after two pitchers, Andy Messersmith and Dave McNally, played without contracts that season. Both became free agents following the 1975 season and were free to pursue contracts with other teams in 1976.
"I was disappointed (in the Supreme Court decision), I really was," Flood said. "When you look at the issue and the issue is this. Should a man be able to work wherever he wants to? Everyone is shaking their heads yes except if you are a baseball player. If you are a baseball player you have all those fans there who love you. You ought to stay in St. Louis until the owner wants to trade you.
"So I was caught up in the fact that this is America and this is probably the greatest country in the world and you can work in quotes any place you want to with the exception at that time in baseball. Now it's come around (early 1990s) where players are starting to make a fair share of the revenue being made in baseball and that delights me. The press seems to think I had a little to do with it and that pleases me."
Six year minor league players can today opted out of major league organizations and seek a chance elsewhere. Six year major league players can become free agents. Flood was the first player to challenge the reserve clause and before his death in 1997 he talked about whether players like him and Jim Bouton (whose book Ball Four made him the bane of baseball and Commissioner Bowie Kuhn's existence) were still lepers in the baseball community.
"No, no no. Well, you see there is a whole new ownership now but they still feel the pinch of the first and 15th (paydays) that may resent me a little. Many of the things I learned in first few days, when you said what was the first week like, in the first week I learned this," Flood explained. "That you will never be a manager (there was no African-American managers in Major League Baseball's modern history through 1969), you will never be in the Hall of Fame and you probably never play baseball again. There are three important points you have to know if you go through with this lawsuit against baseball and now in retrospect those things have never happened. And for me to say that is the reason why would be to get into the heads of ownership which I cannot do."
Flood did say back in the 1990s he was welcomed back to St. Louis. ”One of my teammates (Dal Maxvill) is the General Manager, one of my teammates (Joe Torre) is the manager and many of my greatest friends in the world that I made over 13 years that I was in St. Louis are in some position with the Cardinals there. Joe Cunningham is still with the Cardinals, Ted Savage is still with the Cardinals so of course I am welcomed there," he said.
Curt Flood was never really embraced by baseball. He was hired by another Bowie Kuhn enemy, Oakland A's owner Charles Finley, to work on Athletics radio in 1978 and was the Commissioner of the short-lived Senior Professional Baseball Association, an entity that lasted two years. Flood became involved with the United Baseball League, an idea that never got beyond the let's do it stage after Rupert Murdoch's FOX Sports merged with Liberty Media. Murdoch had a deal with Major League Baseball at the time.
Flood's lawsuit was filed more than 40 years ago and changed the game. In the 1960s athletes were in some cases activists. Billie Jean King has been marginalized in the 21st century but she fought for equal pay and equal educational opportunities for women in an effort to break the college quota system. The Title IX legislation signed into law by President Richard M. Nixon in 1972 was not a sports act rather an education law which gave women equal access to classes and majors in colleges and universities accepting federal funding. Muhammad Ali stuck to his principles in refusing to go into the armed forces in 1967. John Carlos and Tommie Smith staged a black power protest on the podium at the 1968 Mexico City Olympics which drew the ire of International Olympic Committee head Avery Brundage. All of those athletes were vilified in one way or another in those days. Flood has not been recognized by Cooperstown but his legacy is lasting.
The Curt Flood Act of 1998, signed into law by President Bill Clinton gives baseball players the same rights under American antitrust laws that basketball, football, hockey and soccer players enjoy.
Evan Weiner, the winner of the United States Sports Academy's 2010 Ronald Reagan Media Award, is an author, radio-TV commentator and speaker on "The Politics of Sports Business." His book, "The Business and Politics of Sports, Second Edition" is available at bickley.com, Barnes and Noble or amazonkindle.
Thursday, 21 July 2011 16:49
http://www.newjerseynewsroom.com/professional/baseball-hall-of-fame-is-incomplete-without-curt-flood-and-marvin-miller
BY EVAN WEINER
NEWJERSEYNEWSROOM.COM
THE BUSINESS AND POLITICS OF SPORTS
There will be a few new plaques hanging in the Baseball Hall of Fame in Cooperstown, New York as of this weekend but the baseball equivalent of the Smithsonian really is not a complete museum. Unlike the basketball shrine in Springfield, Massachusetts (which included Larry Fleischer who was the first Executive Director of the National Basketball Players Association as a builder) and the hockey Valhalla in Toronto, Ontario (a museum which inducted Alan Eagleson who founded the National Hockey League Players Association until he was booted for illegal activities), the Cooperstown museum has no room for perceived enemies of baseball like Marvin Miller, the founder of the Major League Baseball Players Association or Curt Flood who challenged baseball's reserve clause. Miller and Flood were major contributors to the game but perhaps they did it in a negative way. Cooperstown does honor two-bit baseball scribes for their contributions for providing baseball propaganda and inducts them into a special wing very year.
Miller just missed being elected into the Cooperstown shrine this year. Apparently there are still resentments from certain segments of baseball that linger. Flood has never been considered a serious candidate for an inclusion as a player.
Roberto Alomar and Bert Blyleven were voted into the Hall of Fame by baseball's ultimate sycophants--the Baseball Writers of America- last winter. Pat Gillick, a former General Manager whose stops included a stint with the Philadelphia Phillies was voted in by the veteran's committee. This year's winner of the writer's award goes to Bill Conlin who worked in Philadelphia. Roland Hemond got the Buck O'Neill lifetime achievement award and one time Montreal Expos and Florida Marlins announcer Dave Van Horne gets the announcers award.
Flood challenged the reserve clause which used to literally bind players in perpetuity to a club until the player was deemed by a general manager to be unnecessary.
"Evan, I am so pleased you said that,' was Curt Flood's response to a question back in the early 1990s when asked about the baseball fan's joy of the winter meetings--which is a meat market for baseball teams who trade human beings for others in the hopes that the teams will improve and yet forget that they trade a human being.” You know you kind of have that feeling many many times that at this huge conference table, these wonderful men sit in front of all these contracts and like cards they deal them out, you know.
"You want a shortstop, you want a shortstop, here's a shortstop and unfortunately every time you move a piece of paper and I want you to think about it now. Every time you move one piece of paper from this seat in front of someone else, Mrs. Flood has to find a new school, a new apartment, a new set of friends. Mrs. Flood has to find a new neighborhood. Enormous things happen when you move one player from one town to another when you trade or sell him.
"Sometimes the owners lose sight of that."
Curt Flood was a really good baseball player who began his career in 1956 with the Cincinnati Redlegs (the franchise owners for some reason lengthened the name from the Reds to Redlegs in the 1950s partially in response to America's "anti-Red", anti-communist mood with the Reds name removed from the logo. The name Reds would return in the 1960s). He played some games with Cincinnati and was traded during the December 1957 winter meetings to St. Louis.
Flood spent 12 years in St. Louis and was dealt on October 7, 1969 to Philadelphia along with Tim McCarver, Byron Browne and Joe Horner for Dick Allen, Cookie Rojas and Jerry Johnson. It was on October 7, 1969 that life would not only change for Flood and the other players involved in the deal but the baseball industry as a whole.
Flood refused to report to Philadelphia for a variety of reasons.
"I think it was a decision that came over many, many years of subtle abuses that people under contract have to live with," he explained. "It seems that when a handful of men own the industry, advantages are taking of the employees that under no other circumstances would you sit still for. That was true in baseball before we had the chance to really seriously negotiate the rest of our lives and I guess over the years and over a period of time where I saw men being traded while they drove to the ballpark and they heard on the radio that they no longer worked for the team that they were going to get ready to go suit up for, they were traded in between doubleheaders, they were traded or sold for one reason or another, after enduring that with a lot of my friends, I'd often wonder what the heck would happen if it even happened to me.
"And in 1969 that happened and after great successes in St. Louis, one of the, I can't call them underling, but it certainly wasn't Mr. (Gussie) Busch, the owner, called me on the phone one morning and said hi Curt, you know you have been traded. You know, that was probably the most important conversation in my lifetime and sure as check, the next day, a messenger delivered an envelope with an index sized card in it and it said 'Dear" and someone types your name in, you have been and there are five possibilities. You might not know that. You could have been sold, traded, optioned or whatever, outright, right and traded was checked.
"In the 13 years in St. Louis, I don't know. I think on top of all of the other situations that I saw happen over my career span that had to be the last kick in the pants that baseball wanted to give me."
Flood was a very good player and had won seven Gold Gloves as the best centerfielder in the National League between 1963 and 1969. He hit .300 or better six times and set defensive records for a centerfielder. He was part of two St. Louis Cardinals World Series championships and was co-captain of the team. But his relationship with Busch and the Cardinals had fallen apart by 1969. One reason? He asked for $100,000 which in those days was given to just a few players like Willie Mays, Mickey Mantle and Flood’s one time Cardinals teammate Stan Musial.
"I guess a week went by before you say to yourself, this is not a joke, this is serious. You no longer work here. And I guess about a week and I talked to Alan Zerman, who was my attorney then in St. Louis. He said Curt, you know baseball has been doing this to men for 200 years and you are just part of the machinery and there is very little you can do about it. You can challenge this if you want to and it started to germinate then that something illegal had been done to me.
"Something almost inhumane had been done to me. It kind of snowballed from there."
Curt Flood never did report to Philadelphia and filed a lawsuit against Major League Baseball Commissioner Bowie Kuhn in January 1970 contending that Major League Baseball had committed an antitrust violation. Flood made $90,000 in 1969 and gave up a $100,000 deal to play for the Phillies in 1970. Instead Flood became immersed in learning about the Sherman Antitrust Act and baseball's history with the legal system. Marvin Miller and the Major League Baseball Players Association picked up Flood's legal bills.
"I learned a lot about the law system," Flood said. "And how it operates. I guess not playing that one year, it is necessary to be damaged in that one year and that would have done that. As I thought about it later on, I wished I had not played that one year in 1971 (with the Washington Senators) and the only thing that made me do it was (manager) Ted Williams, I love him. He was going to manage in Washington and he called me. I was in Denmark and he called up and said can I come up and see you. I thought he was down in the lobby. He said no I am in Washington. He said I will meet you halfway. So him (Senators owner Robert Short), they were both on the phone together and he said, no, no, I am not in the lobby. First of all, Robert Short said I got some guys on this team, I don't know if they can play baseball or not but I know you can and I will send you a contract, you sign it and you fill it in. Hohohoho, now you are talking.
"I said Mr. Short, you know the situation, you know the problems we are having with the reserve clause, all this thing is being litigated now in New York. He said they talked to Arthur Goldberg who then was my attorney, Justice Goldberg said that whatever decision the Supreme Court had made it, it already decided and there is nothing you can do short of jumping off a building, unquote, that would change their mind. So I did, I called Justice Goldberg and Marvin Miller and they said if you want to play again, I don't think there is anything you can do to hurt your case.
"How many times can you turn down $150,000 a year?
"Once there may I tell you.
"So they gave me the opportunity to play again and I wasn't going to turn that down. I'm a nice guy; I think I deserved to play for the Senators."
But Flood was busy litigating in 1970 and the baseball inactivity took its toll on the then 33-year old Flood in 1971. He retired after just 13 games with Washington.
"Seventy was like a long winter. You were always expect that at any moment you were going to go back to (the St. Louis Cardinals spring training site) St. Petersburg (Florida) and start what you really do for a living. After a while all of this kind of settles in and your mind accepts that you are no longer a baseball player," he recalled. "But I spent most of 1970 in Denmark, in Copenhagen, in a little place called Vivek where these wonderful nice Danish people would say what do you do for a living? I'm a baseball player. They would say no no no what do you do? I’m a baseball player.
"How do you feed your family?' he laughed.”They know so little about baseball that you could travel in circles where you could have complete anonymity which delighted me. So, it was not easy.
"It was getting over, cold turkey, something you have done every year for almost 15 years. It wasn't easy. 1970 was not an easy year."
Ultimately the Supreme Court of the United States ruled against Flood and his challenge of Baseball's reserve clause. Baseball had won again in the Supreme Court. In 1922, the National and the American Leagues got a favorable ruling in a lawsuit filed by the owners of the Baltimore team in the Federal League which provided the leagues with protection from the country's antitrust laws.
"I was flabbergasted because I am an American and I thought like an American and I thought that everyone could see that baseball players were getting the short end of a very short stick," Flood said more than two decades after the decision.
"However I was trying to explain this to men who would give their first born child to wear this uniform for a minute. Just let me touch it, you know, for me to tell them in this culture look at you how you too would have loved to have worn that uniform for me to say there is something wrong in baseball is like defiling the flag.
"The Supreme Court, I guess they felt the same way that being a baseball player is the best of all worlds and I ought to sit down someplace and shut up. The Supreme Court did not say that, they said they were going to leave this decision to someone else."
That someone else would be an arbitrator named Peter Seitz who ruled against baseball's reserve clause in 1975 after two pitchers, Andy Messersmith and Dave McNally, played without contracts that season. Both became free agents following the 1975 season and were free to pursue contracts with other teams in 1976.
"I was disappointed (in the Supreme Court decision), I really was," Flood said. "When you look at the issue and the issue is this. Should a man be able to work wherever he wants to? Everyone is shaking their heads yes except if you are a baseball player. If you are a baseball player you have all those fans there who love you. You ought to stay in St. Louis until the owner wants to trade you.
"So I was caught up in the fact that this is America and this is probably the greatest country in the world and you can work in quotes any place you want to with the exception at that time in baseball. Now it's come around (early 1990s) where players are starting to make a fair share of the revenue being made in baseball and that delights me. The press seems to think I had a little to do with it and that pleases me."
Six year minor league players can today opted out of major league organizations and seek a chance elsewhere. Six year major league players can become free agents. Flood was the first player to challenge the reserve clause and before his death in 1997 he talked about whether players like him and Jim Bouton (whose book Ball Four made him the bane of baseball and Commissioner Bowie Kuhn's existence) were still lepers in the baseball community.
"No, no no. Well, you see there is a whole new ownership now but they still feel the pinch of the first and 15th (paydays) that may resent me a little. Many of the things I learned in first few days, when you said what was the first week like, in the first week I learned this," Flood explained. "That you will never be a manager (there was no African-American managers in Major League Baseball's modern history through 1969), you will never be in the Hall of Fame and you probably never play baseball again. There are three important points you have to know if you go through with this lawsuit against baseball and now in retrospect those things have never happened. And for me to say that is the reason why would be to get into the heads of ownership which I cannot do."
Flood did say back in the 1990s he was welcomed back to St. Louis. ”One of my teammates (Dal Maxvill) is the General Manager, one of my teammates (Joe Torre) is the manager and many of my greatest friends in the world that I made over 13 years that I was in St. Louis are in some position with the Cardinals there. Joe Cunningham is still with the Cardinals, Ted Savage is still with the Cardinals so of course I am welcomed there," he said.
Curt Flood was never really embraced by baseball. He was hired by another Bowie Kuhn enemy, Oakland A's owner Charles Finley, to work on Athletics radio in 1978 and was the Commissioner of the short-lived Senior Professional Baseball Association, an entity that lasted two years. Flood became involved with the United Baseball League, an idea that never got beyond the let's do it stage after Rupert Murdoch's FOX Sports merged with Liberty Media. Murdoch had a deal with Major League Baseball at the time.
Flood's lawsuit was filed more than 40 years ago and changed the game. In the 1960s athletes were in some cases activists. Billie Jean King has been marginalized in the 21st century but she fought for equal pay and equal educational opportunities for women in an effort to break the college quota system. The Title IX legislation signed into law by President Richard M. Nixon in 1972 was not a sports act rather an education law which gave women equal access to classes and majors in colleges and universities accepting federal funding. Muhammad Ali stuck to his principles in refusing to go into the armed forces in 1967. John Carlos and Tommie Smith staged a black power protest on the podium at the 1968 Mexico City Olympics which drew the ire of International Olympic Committee head Avery Brundage. All of those athletes were vilified in one way or another in those days. Flood has not been recognized by Cooperstown but his legacy is lasting.
The Curt Flood Act of 1998, signed into law by President Bill Clinton gives baseball players the same rights under American antitrust laws that basketball, football, hockey and soccer players enjoy.
Evan Weiner, the winner of the United States Sports Academy's 2010 Ronald Reagan Media Award, is an author, radio-TV commentator and speaker on "The Politics of Sports Business." His book, "The Business and Politics of Sports, Second Edition" is available at bickley.com, Barnes and Noble or amazonkindle.
Monday, July 18, 2011
Rupert Murdoch's News Corp scandal could mean trouble for U.S. sports partners
Monday, 18 July 2011 11:33
http://www.newjerseynewsroom.com/professional/rupert-murdochs-news-corp-scandal-could-mean-trouble-for-us-sports-partners
BY EVAN WEINER
NEWJERSEYNEWSROOM.COM
THE BUSINESS AND POLITICS OF SPORTS
The National Football League lockout may be winding down but NFL Commissioner Roger Goodell, the 31 franchise owners and the Green Bay Packers Board of Directors may be facing a much bigger problem in the very near future if Rupert Murdoch's media business problems in England spread across the Atlantic and hit News Corp properties in the United States.
Murdoch has taken a financial hit which has forced him to buy back a significant share of his company's stock. In the case of the National Football League and Major League Baseball, he doesn't have cable subscriber fees to help pay off the licensing fees to show games on over-the-air television. His cable TV properties have no such problems in that most of the ones that pay huge rights fees to teams are on the basic expanded tier which means all of the people who get basic expanded are paying for what a few watch. It is cable TV socialism that makes Rupert Murdoch's business work, a cable TV socialism bill in the form of a 1984 piece of Congressional legislation signed into law by President Ronald Reagan allows the bundling of cable channels to be sold as one to consumers.
The 1984 cable television legislation seems to be at complete odds with the free market principles espoused by Murdoch's news and financial channels but Murdoch is all about money, not ideology.
In 1993, Murdoch gave the NFL a huge amount of money after his company won bidding rights for National Football Conference telecasts and the marriage seems to have been a happy one for both sides. So much so that Murdoch agreed to help underwrite the 2011 NFL Lockout and provide the owners with money (along with General Electric's NBC, the Walt Disney Company's ESPN, Sumner Redstone's CBS and DirecTV) to get along if there was no 2011 NFL season.
That seems like gratitude but the NFL made that demand of over-the-air, cable and satellite TV networks in the last television negotiations and got the five TV partners to agree to their demands.
Back in 1993, the NFL got billions and Rupert Murdoch was able to get his FOX over-the-air television network (although technically FOX is a syndication arm) off the ground. The NFL gave Murdoch and FOX credibility and once Murdoch got that street cred, he was able to work on other United States projects including the launch of the FOX News Channel.
There has never been any hint of impropriety in Murdoch's sports businesses whether it was with over-the-air network contracts with the National Football League, National Hockey League, Major League Baseball, NASCAR and other properties including the Bowl Championship Series or his relatively brief ownership of the Los Angeles Dodgers at the turn of the century.
(Murdoch's FOX Los Angeles regional cable sports network recently worked a deal with embattled Dodgers owner Frank McCourt, some of the money would come out of subscribers' pockets would have gone to help pay the divorce settlement between Frank McCourt and his soon to be former wife Jamie. The deal was stopped by Selig but someone will eventually get big money for Dodgers TV rights from someone whether that someone is Murdoch or some other Los Angeles cable TV entity)
But make no mistake, Rupert Murdoch and News Corp is heavily invested in American sports and given his seemingly significant problems in London that include the folding of the News of the World newspaper, numerous arrests of News International employees, the resignation of the top cop at Scotland Yard in conjunction phone hacking scandal that is engulfing Murdoch's empire that could be a problem for Goodell, Major League Baseball Commissioner Bud Selig and others.
Do sports leagues want to be associated anymore with Murdoch and what happens if there are complaints about Murdoch's suitability to own TV stations in the United States? What happens to the rights deals that Murdoch's people have worked out with sports leagues and teams?
That may be an issue facing Goodell, Selig and others down the road depending on just how large the News of the World and other Murdoch properties in the UK, US and Australia scandal become. Murdoch has shut down the paper and has seen one of his closest associates arrested. That is not good on the resume for TV station license renewals.
Before the NFL, Murdoch's FOX network was a weak collection of UHF stations with the exception of a few cities like New York, Washington, and Los Angeles. Before the NFL, FOX had a few shows that drew some attention, the It's Gary Shandling's Show, the Tracy Ullman Show and Married With Children. Out of the Ullman show came The Simpsons, Shandling's show originally ran on Showtime and then went to FOX. Ullman's show was canceled in 1990. FOX could not establish a late night talk show, the Joan Rivers experiment was a disaster and a 1993 Chevy Chase late night show as a bomb. Not much worked for Murdoch.
Neither Al Bundy nor Bart Simpson, as popular as the characters would become, could bolster FOX. Murdoch's team was buying TV stations and became the biggest owner of over-the-air stations in the United States but by 1993, it was still the fourth network in a three horse race for ratings behind CBS, NBC and ABC.
The NFL changed all of that. Actually, it was Jerry Jones, the owner of the Dallas Cowboys that put Murdoch on the map as Jones and Murdoch negotiated the TV deal that would change everything. The NFL had been prospering from TV rights fees since the 1961 Sports Broadcast Act which allowed the league commissioner, who is also the league's chief negotiator and lobbyist in all things NFL, to bundle the 14 member franchises into one entity in order to negotiate a TV deal. Three decades later, the NFL was a 30 franchise entity with four separate and distinct elements. CBS had the National Football Conference contests and paid slightly more money for the NFC than NBC did for American Football Conference games because the NFC had more major markets. ABC had Monday Night Football and ESPN and Turner Sports split a Sunday night package.
The NFL was being paid $3.6 million over a four year period between 1990 and 1993.
Murdoch's fourth place network was desperate for a game changer and the NFL provided him with an opening. The NFL and Jones were knocked over by Murdoch's bid for the NFC games. Murdoch was willing to fork over $1.58 billion over four years to get the NFC package along with the Super Bowl. Murdoch had a syndication arm but no news division, no sports division, none of the apparatus that CBS, ABC and NBC had. Murdoch knew that the NFL deals with an old philosophy, cash on the barrel head gets serious consideration and because he blew CBS out of the water with his bid, the NFL and Jones knew they would be getting a new partner with a patchwork of big city VHF and small area UHF stations and both sides would have to make it work.
In December 1993, The NFL took the money. In retrospect, it was the right decision but at the time it looked like just a money grab.
In early 1994, Murdoch started to prepare for the 1994 season by quickly established a sports department by giving John Madden an enormous contact and hiring his sidekick Pat Summerall. Murdoch also took Madden's CBS support team and made John feel right at home. Madden would become the face of FOX sports and with the NFL in tow, Murdoch was able to steal VHF stations in Detroit and Milwaukee away from CBS. Murdoch had one of TV's crown jewels, the NFL, and FOX would now be in a position to become a serious player in American TV.
It can be suggested that the success of the NFL and Madden on FOX led to Murdoch to start the FOX News Channel. The over-the-air network, still technically a syndication arm, started producing hits like the X-Files along with Beverly Hills 90210, Melrose Place, In Living Color to go along with The Simpsons and Married With Children. Murdoch didn't have blockbuster ratings but the network was doing okay business and he already had a satellite news network in Europe, Murdoch turned to creating a United States cable TV news channel.
There are no what if questions. The NFL changed the fortunes of both Murdoch and Lawrence Tisch's CBS. In 1993, CBS completed the TV hat trick; it won daytime, prime time and late night ratings. David Letterman had just moved over to the network and things were looking good. But Tisch's CBS did not invest in cable TV, lost the NFL and Madden, football's top star both on and off the field, lost affiliates and would start a downward spiral. Murdoch's FOX Sports added the National Hockey League and Major League Baseball soon after the NFL deal. Eventually Murdoch would gain NASCAR and the Bowl Championship Series. On the cable TV side, Murdoch's regional sports cable networks are still strong despite being challenged by upstarts in the past few years. FOX either owns or has agreements with 24 regionals. There is also a partnership with The Big Ten Network and another with the Pac12 conference.
Murdoch's Fox Soccer Channel has the UEFA Champions League, Premier League, and Serie A among other competitions. Fox Soccer Plus has soccer and rugby programming from around the world. Murdoch's Speed Channel provides NASCAR and F-1 coverage,
Murdoch's Fuel TV presents action sports such as skateboarding, surfing, snowboarding, BMX and FMX.
Murdoch's Fox Deportes provides Spanish-language coverage of UEFA Champions League, Premiere League, and Serie A as well as Beach Soccer and the F.A. Cup. It also presents the Spanish-language Major League Baseball Game of the Week, the All Star Game, and the World Series, as well as division and league playoffs. Fox Deportes probably would not play well with FOX News Channel viewers but Murdoch doesn't really have an ideology except identifying an audience to exploit to make money. FOX Deportes is aimed at Spanish speakers in the United States, some illegal aliens more than likely, not at FOX News Channel watchers.
That's Murdoch.
Rupert Murdoch built over-the-air viable network thanks to throwing money at the NFL, he had built a strong regional sports cable network, he had his news channel and became an American citizen because non American citizens could not own TV networks. Murdoch, the Australian, should not have owned FOX but American President Bill Clinton's Federal Communication Commission in 1995 allowed Murdoch to run FOX because it was "in the best interest of the public."
Murdoch has invested billions in American sports. So far the leagues and teams have said nothing about the events in London. FOX Sports has been above board according to those in the know but league and team operators have to be keeping a close eye on what is going on with the News of the World unraveling because it could have a real impact on their businesses.
Evan Weiner, the winner of the United States Sports Academy's 2010 Ronald Reagan Media Award, is an author, radio-TV commentator and speaker on "The Politics of Sports Business." His book, "The Business and Politics of Sports, Second Edition" is available at bickley.com, Barnes and Noble or amazonkindle.
Monday, 18 July 2011 11:33
http://www.newjerseynewsroom.com/professional/rupert-murdochs-news-corp-scandal-could-mean-trouble-for-us-sports-partners
BY EVAN WEINER
NEWJERSEYNEWSROOM.COM
THE BUSINESS AND POLITICS OF SPORTS
The National Football League lockout may be winding down but NFL Commissioner Roger Goodell, the 31 franchise owners and the Green Bay Packers Board of Directors may be facing a much bigger problem in the very near future if Rupert Murdoch's media business problems in England spread across the Atlantic and hit News Corp properties in the United States.
Murdoch has taken a financial hit which has forced him to buy back a significant share of his company's stock. In the case of the National Football League and Major League Baseball, he doesn't have cable subscriber fees to help pay off the licensing fees to show games on over-the-air television. His cable TV properties have no such problems in that most of the ones that pay huge rights fees to teams are on the basic expanded tier which means all of the people who get basic expanded are paying for what a few watch. It is cable TV socialism that makes Rupert Murdoch's business work, a cable TV socialism bill in the form of a 1984 piece of Congressional legislation signed into law by President Ronald Reagan allows the bundling of cable channels to be sold as one to consumers.
The 1984 cable television legislation seems to be at complete odds with the free market principles espoused by Murdoch's news and financial channels but Murdoch is all about money, not ideology.
In 1993, Murdoch gave the NFL a huge amount of money after his company won bidding rights for National Football Conference telecasts and the marriage seems to have been a happy one for both sides. So much so that Murdoch agreed to help underwrite the 2011 NFL Lockout and provide the owners with money (along with General Electric's NBC, the Walt Disney Company's ESPN, Sumner Redstone's CBS and DirecTV) to get along if there was no 2011 NFL season.
That seems like gratitude but the NFL made that demand of over-the-air, cable and satellite TV networks in the last television negotiations and got the five TV partners to agree to their demands.
Back in 1993, the NFL got billions and Rupert Murdoch was able to get his FOX over-the-air television network (although technically FOX is a syndication arm) off the ground. The NFL gave Murdoch and FOX credibility and once Murdoch got that street cred, he was able to work on other United States projects including the launch of the FOX News Channel.
There has never been any hint of impropriety in Murdoch's sports businesses whether it was with over-the-air network contracts with the National Football League, National Hockey League, Major League Baseball, NASCAR and other properties including the Bowl Championship Series or his relatively brief ownership of the Los Angeles Dodgers at the turn of the century.
(Murdoch's FOX Los Angeles regional cable sports network recently worked a deal with embattled Dodgers owner Frank McCourt, some of the money would come out of subscribers' pockets would have gone to help pay the divorce settlement between Frank McCourt and his soon to be former wife Jamie. The deal was stopped by Selig but someone will eventually get big money for Dodgers TV rights from someone whether that someone is Murdoch or some other Los Angeles cable TV entity)
But make no mistake, Rupert Murdoch and News Corp is heavily invested in American sports and given his seemingly significant problems in London that include the folding of the News of the World newspaper, numerous arrests of News International employees, the resignation of the top cop at Scotland Yard in conjunction phone hacking scandal that is engulfing Murdoch's empire that could be a problem for Goodell, Major League Baseball Commissioner Bud Selig and others.
Do sports leagues want to be associated anymore with Murdoch and what happens if there are complaints about Murdoch's suitability to own TV stations in the United States? What happens to the rights deals that Murdoch's people have worked out with sports leagues and teams?
That may be an issue facing Goodell, Selig and others down the road depending on just how large the News of the World and other Murdoch properties in the UK, US and Australia scandal become. Murdoch has shut down the paper and has seen one of his closest associates arrested. That is not good on the resume for TV station license renewals.
Before the NFL, Murdoch's FOX network was a weak collection of UHF stations with the exception of a few cities like New York, Washington, and Los Angeles. Before the NFL, FOX had a few shows that drew some attention, the It's Gary Shandling's Show, the Tracy Ullman Show and Married With Children. Out of the Ullman show came The Simpsons, Shandling's show originally ran on Showtime and then went to FOX. Ullman's show was canceled in 1990. FOX could not establish a late night talk show, the Joan Rivers experiment was a disaster and a 1993 Chevy Chase late night show as a bomb. Not much worked for Murdoch.
Neither Al Bundy nor Bart Simpson, as popular as the characters would become, could bolster FOX. Murdoch's team was buying TV stations and became the biggest owner of over-the-air stations in the United States but by 1993, it was still the fourth network in a three horse race for ratings behind CBS, NBC and ABC.
The NFL changed all of that. Actually, it was Jerry Jones, the owner of the Dallas Cowboys that put Murdoch on the map as Jones and Murdoch negotiated the TV deal that would change everything. The NFL had been prospering from TV rights fees since the 1961 Sports Broadcast Act which allowed the league commissioner, who is also the league's chief negotiator and lobbyist in all things NFL, to bundle the 14 member franchises into one entity in order to negotiate a TV deal. Three decades later, the NFL was a 30 franchise entity with four separate and distinct elements. CBS had the National Football Conference contests and paid slightly more money for the NFC than NBC did for American Football Conference games because the NFC had more major markets. ABC had Monday Night Football and ESPN and Turner Sports split a Sunday night package.
The NFL was being paid $3.6 million over a four year period between 1990 and 1993.
Murdoch's fourth place network was desperate for a game changer and the NFL provided him with an opening. The NFL and Jones were knocked over by Murdoch's bid for the NFC games. Murdoch was willing to fork over $1.58 billion over four years to get the NFC package along with the Super Bowl. Murdoch had a syndication arm but no news division, no sports division, none of the apparatus that CBS, ABC and NBC had. Murdoch knew that the NFL deals with an old philosophy, cash on the barrel head gets serious consideration and because he blew CBS out of the water with his bid, the NFL and Jones knew they would be getting a new partner with a patchwork of big city VHF and small area UHF stations and both sides would have to make it work.
In December 1993, The NFL took the money. In retrospect, it was the right decision but at the time it looked like just a money grab.
In early 1994, Murdoch started to prepare for the 1994 season by quickly established a sports department by giving John Madden an enormous contact and hiring his sidekick Pat Summerall. Murdoch also took Madden's CBS support team and made John feel right at home. Madden would become the face of FOX sports and with the NFL in tow, Murdoch was able to steal VHF stations in Detroit and Milwaukee away from CBS. Murdoch had one of TV's crown jewels, the NFL, and FOX would now be in a position to become a serious player in American TV.
It can be suggested that the success of the NFL and Madden on FOX led to Murdoch to start the FOX News Channel. The over-the-air network, still technically a syndication arm, started producing hits like the X-Files along with Beverly Hills 90210, Melrose Place, In Living Color to go along with The Simpsons and Married With Children. Murdoch didn't have blockbuster ratings but the network was doing okay business and he already had a satellite news network in Europe, Murdoch turned to creating a United States cable TV news channel.
There are no what if questions. The NFL changed the fortunes of both Murdoch and Lawrence Tisch's CBS. In 1993, CBS completed the TV hat trick; it won daytime, prime time and late night ratings. David Letterman had just moved over to the network and things were looking good. But Tisch's CBS did not invest in cable TV, lost the NFL and Madden, football's top star both on and off the field, lost affiliates and would start a downward spiral. Murdoch's FOX Sports added the National Hockey League and Major League Baseball soon after the NFL deal. Eventually Murdoch would gain NASCAR and the Bowl Championship Series. On the cable TV side, Murdoch's regional sports cable networks are still strong despite being challenged by upstarts in the past few years. FOX either owns or has agreements with 24 regionals. There is also a partnership with The Big Ten Network and another with the Pac12 conference.
Murdoch's Fox Soccer Channel has the UEFA Champions League, Premier League, and Serie A among other competitions. Fox Soccer Plus has soccer and rugby programming from around the world. Murdoch's Speed Channel provides NASCAR and F-1 coverage,
Murdoch's Fuel TV presents action sports such as skateboarding, surfing, snowboarding, BMX and FMX.
Murdoch's Fox Deportes provides Spanish-language coverage of UEFA Champions League, Premiere League, and Serie A as well as Beach Soccer and the F.A. Cup. It also presents the Spanish-language Major League Baseball Game of the Week, the All Star Game, and the World Series, as well as division and league playoffs. Fox Deportes probably would not play well with FOX News Channel viewers but Murdoch doesn't really have an ideology except identifying an audience to exploit to make money. FOX Deportes is aimed at Spanish speakers in the United States, some illegal aliens more than likely, not at FOX News Channel watchers.
That's Murdoch.
Rupert Murdoch built over-the-air viable network thanks to throwing money at the NFL, he had built a strong regional sports cable network, he had his news channel and became an American citizen because non American citizens could not own TV networks. Murdoch, the Australian, should not have owned FOX but American President Bill Clinton's Federal Communication Commission in 1995 allowed Murdoch to run FOX because it was "in the best interest of the public."
Murdoch has invested billions in American sports. So far the leagues and teams have said nothing about the events in London. FOX Sports has been above board according to those in the know but league and team operators have to be keeping a close eye on what is going on with the News of the World unraveling because it could have a real impact on their businesses.
Evan Weiner, the winner of the United States Sports Academy's 2010 Ronald Reagan Media Award, is an author, radio-TV commentator and speaker on "The Politics of Sports Business." His book, "The Business and Politics of Sports, Second Edition" is available at bickley.com, Barnes and Noble or amazonkindle.
Wednesday, July 13, 2011
Deron Williams revives NBA players' interest in Europe
WEDNESDAY, 13 JULY 2011 10:23
http://www.newjerseynewsroom.com/professional/deron-williams-revives-nba-players-interest-in-europe
BY EVAN WEINER
NEWJERSEYNEWSROOM.COM
THE BUSINESS AND POLITICS OF SPORTS
It has been 36 years since high school, college, and the NBA had a legitimate choice when it came to where they wanted to play professional basketball. In 1975, a high school player could go to college or into the American Basketball Association. A college player could leave school early and have either the NBA or the ABA offer him a huge — by 1975 standards — pro contract. And NBA players could jump over to the ABA, and vice versa. Since the NBA's absorption of four ABA teams in 1976, players have been limited in their location choices.
The NBA lockout wants to tighten player movement in free agency and bring down salaries and owners expenses. But the locked players may be looking elsewhere to work if you believe Deron Williams. The New Jersey Nets player is thinking of playing professional ball in Turkey if the National Basketball Association lockout lasts an extended time. But Williams is not the first player in recent time who is considering European basketball.
In 2008, just before the global financial meltdown, some players such as Ben Gordon, who was a restricted free agent, suddenly thought they had a European option. Gordon, the first rookie ever to win the NBA's Sixth Man of the Year Award in 2004-05, considered leaving the NBA for Europe if the circumstances were right.
Gordon ultimately signed a five year contract with Detroit in 2009 foregoing Europe. But the NBA has locked out the players and the hostility between the two sides is evident on individual team websites. Current players have vanished from team sites and are apparently free to play in any other league in the world. It seems that the players are free to go elsewhere like National Hockey League players did in 2004 when NHL owners shut the doors on the players.
"What has been happening this year (2008), especially with the free agents, you are starting to see guys who are using overseas as another option," Gordon said in an interview. "To me, personally, I think it is a beautiful thing that people from all over the world and players from all over the world have a chance to play in the NBA, and players over here a chance to play in Europe.
"When you get a guy like Kobe Bryant mentioning or considering playing overseas, if everything was right, I think it totally changes the whole landscape of basketball."
In 2008, nine NBA players have decided that the league isn't the end-all for them, and have signed with European, Russian, and Israeli teams. No big names crossed the Atlantic but Bryant sent out a message that once he was done with his Lakers contract after the 2009 campaign he thought Italy could be calling him. LeBron James said at that time that he might be open to a European team offer when his deal with the Cleveland Cavaliers ends in 2010. Dwyane Wade's deal with Miami also ended in 2010. In the NBA, there is a salary cap that limits how much money Bryant, James, or Wade can be paid. There is no salary cap in Europe.
None of the three players left the NBA.
"I know, growing up, my dream was to play in the NBA, hands down. It wasn't about the money," Gordon said. "Once you get to the NBA, things begin to change, it becomes more of a business. When you hear players as big as the Kobes and LeBrons talking about the possibility of playing overseas, it [shows it] is more of a business now. They are just not basketball players — now they are businessmen, so they have to think from a different aspect."
James and Bryant are corporations and brand names, and that could have played into the final decision on where they want to play. What if James's shoe partner, Nike, wanted to make him a bigger brand name in Europe and whispers in his ear that it makes sense for him to play in Barcelona or Athens. Because of the partners and the strength of the euro against the American dollar it was conceivable that James could have played in Europe. And Bryant might have ended up owning a team in Italy.
Nothing happened after 2008 but with the NBA out of business it could be a different story. Big name Americans may jump across the pond.
The commissioner of the NBA, David Stern, has spent the better part of the last 10 years promoting European expansion. Originally, Stern envisioned an NBA European league by 2010. Europe is lagging in building NBA state-of-the-art facilities, but more are coming online. London is ready, Berlin has an NBA-style arena opening and Rome may soon follow suit. The other European problem is whether or not local companies will want to pay the price for NBA tickets, and if local cable and satellite TV networks would want to pay a heavy price for the rights to NBA games.
The players who left the NBA in 2008 (the last major migration of NBA players to Europe), for the most part, were Europeans returning home, with the exceptions of Josh Childress, who left the Atlanta Hawks to sign a more lucrative deal with Olympicos in Greece's basketball league, and Carlos Arroyo, who will play with Maccabi Tel Aviv in Israel. Arroyo got a deal that was better than what he would have received with his former team, the Orlando Magic.
The NBA doesn't seem too concerned that Childress or the others have left, and the league has adopted the position that the best players in the world will want to play in the NBA anyway. But eventually wheelbarrows filled with Euros can trump that notion.
Not every elite player can play in the NBA, because of Stern's desire to keep 18-year-olds out of his league. Ultimately, American college basketball could find itself in the same position as it was when elite high school players skipped college and went into the NBA. Brandon Jennings could have been the trailblazer who could upset the applecart.
Jennings didn't play much in Europe but when he came back to the United States after a year overseas, he became a star with Milwaukee. A few other players tried to go Jennings' route but didn’t succeed.
The Jennings signing with Pallacanestro Virtus Roma of the Italian pro league didn’t hurt the NBA and had virtually no impact on college basketball. Jennings was supposed to play as an 18-year-old at the University of Arizona on a college scholarship. Instead, he signed a multiyear contract with an escape clause should an NBA team take him in the 2009 draft. Jennings may have been the best point guard in high school in 2007-08, and under the old collective bargaining agreement, he would have been eligible to be selected that year.
Had Jennings been able to make a smooth transition from being a high school player to living in Rome while playing pro basketball that would have opened up Europe as a pretty good alternative to college basketball in America. Sneaker companies will again be able to sign top American high school basketball players to endorsement deals, and this time, they will be able to showcase the player to a European market. But Jennings didn’t get much playing time and very few followed him overseas.
The timing may be better for a jump across the pond now that the NBA is on hiatus.
"The landscape is changing and the market and climate is a little different than it has been in the past," Gordon said in 2008. He was correct three years ago and is right today: The NBA may still be the best basketball league on the planet, but it has been closed down and it is not the only league willing to pay big salaries, and players and their agents know it.
The NBA lockout may revive an idea that some players were thinking of pursuing in 2008. Go to Europe and play.
Evan Weiner, the winner of the United States Sports Academy's 2010 Ronald Reagan Media Award, is an author, radio-TV commentator and speaker on "The Politics of Sports Business." His book, "The Business and Politics of Sports, Second Edition" is available at bickley.com, Barnes and Noble or amazonkindle.
WEDNESDAY, 13 JULY 2011 10:23
http://www.newjerseynewsroom.com/professional/deron-williams-revives-nba-players-interest-in-europe
BY EVAN WEINER
NEWJERSEYNEWSROOM.COM
THE BUSINESS AND POLITICS OF SPORTS
It has been 36 years since high school, college, and the NBA had a legitimate choice when it came to where they wanted to play professional basketball. In 1975, a high school player could go to college or into the American Basketball Association. A college player could leave school early and have either the NBA or the ABA offer him a huge — by 1975 standards — pro contract. And NBA players could jump over to the ABA, and vice versa. Since the NBA's absorption of four ABA teams in 1976, players have been limited in their location choices.
The NBA lockout wants to tighten player movement in free agency and bring down salaries and owners expenses. But the locked players may be looking elsewhere to work if you believe Deron Williams. The New Jersey Nets player is thinking of playing professional ball in Turkey if the National Basketball Association lockout lasts an extended time. But Williams is not the first player in recent time who is considering European basketball.
In 2008, just before the global financial meltdown, some players such as Ben Gordon, who was a restricted free agent, suddenly thought they had a European option. Gordon, the first rookie ever to win the NBA's Sixth Man of the Year Award in 2004-05, considered leaving the NBA for Europe if the circumstances were right.
Gordon ultimately signed a five year contract with Detroit in 2009 foregoing Europe. But the NBA has locked out the players and the hostility between the two sides is evident on individual team websites. Current players have vanished from team sites and are apparently free to play in any other league in the world. It seems that the players are free to go elsewhere like National Hockey League players did in 2004 when NHL owners shut the doors on the players.
"What has been happening this year (2008), especially with the free agents, you are starting to see guys who are using overseas as another option," Gordon said in an interview. "To me, personally, I think it is a beautiful thing that people from all over the world and players from all over the world have a chance to play in the NBA, and players over here a chance to play in Europe.
"When you get a guy like Kobe Bryant mentioning or considering playing overseas, if everything was right, I think it totally changes the whole landscape of basketball."
In 2008, nine NBA players have decided that the league isn't the end-all for them, and have signed with European, Russian, and Israeli teams. No big names crossed the Atlantic but Bryant sent out a message that once he was done with his Lakers contract after the 2009 campaign he thought Italy could be calling him. LeBron James said at that time that he might be open to a European team offer when his deal with the Cleveland Cavaliers ends in 2010. Dwyane Wade's deal with Miami also ended in 2010. In the NBA, there is a salary cap that limits how much money Bryant, James, or Wade can be paid. There is no salary cap in Europe.
None of the three players left the NBA.
"I know, growing up, my dream was to play in the NBA, hands down. It wasn't about the money," Gordon said. "Once you get to the NBA, things begin to change, it becomes more of a business. When you hear players as big as the Kobes and LeBrons talking about the possibility of playing overseas, it [shows it] is more of a business now. They are just not basketball players — now they are businessmen, so they have to think from a different aspect."
James and Bryant are corporations and brand names, and that could have played into the final decision on where they want to play. What if James's shoe partner, Nike, wanted to make him a bigger brand name in Europe and whispers in his ear that it makes sense for him to play in Barcelona or Athens. Because of the partners and the strength of the euro against the American dollar it was conceivable that James could have played in Europe. And Bryant might have ended up owning a team in Italy.
Nothing happened after 2008 but with the NBA out of business it could be a different story. Big name Americans may jump across the pond.
The commissioner of the NBA, David Stern, has spent the better part of the last 10 years promoting European expansion. Originally, Stern envisioned an NBA European league by 2010. Europe is lagging in building NBA state-of-the-art facilities, but more are coming online. London is ready, Berlin has an NBA-style arena opening and Rome may soon follow suit. The other European problem is whether or not local companies will want to pay the price for NBA tickets, and if local cable and satellite TV networks would want to pay a heavy price for the rights to NBA games.
The players who left the NBA in 2008 (the last major migration of NBA players to Europe), for the most part, were Europeans returning home, with the exceptions of Josh Childress, who left the Atlanta Hawks to sign a more lucrative deal with Olympicos in Greece's basketball league, and Carlos Arroyo, who will play with Maccabi Tel Aviv in Israel. Arroyo got a deal that was better than what he would have received with his former team, the Orlando Magic.
The NBA doesn't seem too concerned that Childress or the others have left, and the league has adopted the position that the best players in the world will want to play in the NBA anyway. But eventually wheelbarrows filled with Euros can trump that notion.
Not every elite player can play in the NBA, because of Stern's desire to keep 18-year-olds out of his league. Ultimately, American college basketball could find itself in the same position as it was when elite high school players skipped college and went into the NBA. Brandon Jennings could have been the trailblazer who could upset the applecart.
Jennings didn't play much in Europe but when he came back to the United States after a year overseas, he became a star with Milwaukee. A few other players tried to go Jennings' route but didn’t succeed.
The Jennings signing with Pallacanestro Virtus Roma of the Italian pro league didn’t hurt the NBA and had virtually no impact on college basketball. Jennings was supposed to play as an 18-year-old at the University of Arizona on a college scholarship. Instead, he signed a multiyear contract with an escape clause should an NBA team take him in the 2009 draft. Jennings may have been the best point guard in high school in 2007-08, and under the old collective bargaining agreement, he would have been eligible to be selected that year.
Had Jennings been able to make a smooth transition from being a high school player to living in Rome while playing pro basketball that would have opened up Europe as a pretty good alternative to college basketball in America. Sneaker companies will again be able to sign top American high school basketball players to endorsement deals, and this time, they will be able to showcase the player to a European market. But Jennings didn’t get much playing time and very few followed him overseas.
The timing may be better for a jump across the pond now that the NBA is on hiatus.
"The landscape is changing and the market and climate is a little different than it has been in the past," Gordon said in 2008. He was correct three years ago and is right today: The NBA may still be the best basketball league on the planet, but it has been closed down and it is not the only league willing to pay big salaries, and players and their agents know it.
The NBA lockout may revive an idea that some players were thinking of pursuing in 2008. Go to Europe and play.
Evan Weiner, the winner of the United States Sports Academy's 2010 Ronald Reagan Media Award, is an author, radio-TV commentator and speaker on "The Politics of Sports Business." His book, "The Business and Politics of Sports, Second Edition" is available at bickley.com, Barnes and Noble or amazonkindle.
Friday, July 8, 2011
A sports FAQ guide to NFL and NBA lockouts
FRIDAY, 08 JULY 2011 07:52
http://www.newjerseynewsroom.com/professional/a-sports-faq-guide-to-nfl-and-nba-lockouts
BY EVAN WEINER
NEWJERSEYNEWSROOM.COM
THE BUSINESS AND POLITICS OF SPORTS
Sports lockouts should come with a frequently asked questions guide for the sports media and sports fans. You see whether it is the National Football League lockout or the National Basketball Association lockout they is a small impact on virtually every American taxpayer and those who a cable TV basic expanded tier subscribers.
There are some questions that need to be answered for everyone. For instance, why are cable TV subscribers underwriting sports owners lockout? The Walt Disney Company plans to pay the National Football League a rights fee whether the NFL plans a full schedule or misses some games. Will cable TV subscribers get any refunds or rebates from ESPN? The answer is no.
National and regional cable TV sports networks have a long history of not refunding subscribers for missed sports programming including the 1998-1999 National Basketball Association lockout. Don't expect any refunds from ESPN, Cablevision's Madison Square Garden Network for missed Knicks games or Comcast for missed Philadelphia 76ers games. Cablevision owns the Knicks and Comcast owns the 76ers.
There are numerous sports owners who either own regional cable TV networks outright like Comcast or pieces of cable TV regional sports networks. In Chicago, Comcast is partners with Jerry Reinsdorf's Chicago Bulls, Reinsdorf's White Sox, the Chicago Cubs ownership and Rocky Wirtz's Chicago Blackhawks in the city's regional sports network.
What kind of economic impact will the lockouts have?
Not as much as people think. A National Football League team has 10 home dates (Buffalo has eight or nine with one regular season game in Toronto depending on the season) while an NBA team might host on average about six games a month between the beginning of November and mid-April to complete a 41 game home schedule. There may be a couple of pre-season games and playoff games. But the overall economic impact is minimal.
Visiting teams don't bring a lot of fans with them to attend NBA games and a typical NBA team sends players, coaches, equipment guys and trainers along with broadcasters on the road. It is not a big traveling party and that means not many hotel rooms are needed and restaurants aren't making a living off of having NBA teams come through.
In 1998-99, Golden State Warriors owner Charles Cohan didn't want to pay rent at the Oakland Arena for missed games during the NBA lockout. The municipally owned arena operators took Cohan to arbitration where he lost. How many owners in both the NFL and NBA will attempt to withhold rent payments?
That should be a FAQ.
Some municipalities will lose some sales tax monies from ticket sales and concessions but municipalities have decided not to collect property taxes on arenas throughout the country. In New York, Philadelphia and in California, municipalities will be denied of the "Michael Jordan tax" and collect taxes from players who are in for a day playing.
Some businesses around arenas and stadiums will lose money and that has caught the attention of the Attorney General of the State of New York. Eric T. Schneiderman claims he is taking action acting on behalf of a handful of businesses and workers whose incomes are threatened if there are no Bills games in Orchard Park.
The Florham Park, N.J.-based New York Jets franchise, which plays games in East Rutherford, will not be holding training camp at Cortland State in central New York.
Schneiderman's office sent NFL Commissioner Roger Goodell a letter informing him that the state plans to investigate the NFL to see if the league, the 31 owners and Green Bay, has violated New York antitrust laws.
The letter overstates the real impact the NFL lockout has on businesses but Schneiderman is the first politician seeking to involve himself in the lockout. Schneider is looking out for hotels, retailers, the New York transportation system of buses and trains and cars and the per diem workers who could lose between nine and 12 days worth of work in Orchard Park and the couple of weeks of pre-season workouts a New York State universities in Cortland, Albany and Fredonia training facilities.
To quote Donald Trump, the economic impact is small potatoes. A few people will get hurt but the jobs Schneiderman is protecting are part time minimum wage positions at the stadiums and training camps.
Sports teams’ economic impact on a given area is always overstated. Also people are going to spend money on entertainment, they will just shift that football or basketball dollars elsewhere.
"The expected blow to the state's economy will be tremendous," wrote Assistant Attorney general Richard L. Schwartz. "Many New York public and private institutions depend heavily on the NFL training camp and regular season games to generate revenue."
A note to the assistant attorney general, Cortland State, doesn’t depend on whether the New York Jets training camp takes place at the campus’ main stadium. Mr. Schwartz might want to check the books of the college to see just how profitable or unprofitable having an NFL team on the premises is for the school. It might startle him and others in the Attorney General’s office to see the books at Cortland.
Ralph Wilson's Buffalo Bills gets about $7 million in subsidies for stadium maintenance and day of game operations.
The entity formally known as the National Football League Players Association put out a paper that contended that if there was no 2011 NFL season, that $160 million in local spending in each league city and 3,000 jobs would be wiped out. The NFLPA stance seems absolutely ludicrous given the fact that the league plays just 10 home games except in East Rutherford where the stadium houses two teams and stadium jobs are dead end per diem positions which would supplement someone's income.
The real money losers are the players and cable TV subscribers underwriting labor actions and not even knowing it.
If Schneiderman really wanted to conduct a thorough investigation, he would start with the television networks, Sumner Redstone's CBS, General Electric's NBC (now majority owned by Comcast), Rupert Murdoch's News Corp (FOX), the Walt Disney Company (ESPN) and DirecTV and ask why those entities are underwriting the owners costs in the lockout. Schneider can also check in with the NBA and see if Time Warner's Turner Sports and the Walt Disney Company's ESPN are underwriting the NBA lockout and investigate the Dolan family's Cablevision and ask if any fees that are being collected are going to the Knicks from the Madison Square Garden Network. He can also ask Goldman-Sachs and the New York Yankees owned YES Network about fees going to the New Jersey Nets.
That would just be a New York investigation. Similar inquiries could take place around the country.
Those are just a few FAQs that should be asked and answered. In the toy store of media, the sports department-writers, TV talking heads and radio talk show hosts are infuriated that their world has collided with the real world sort of - after all they want to be entertained with games and want no part of how sports really operates. If Schneiderman was truly serious about probing sports, there is a lot out there but his inquiry will be forgotten once the two sides in the NFL battle call a truce and reach an agreement.
Evan Weiner, the winner of the United States Sports Academy's 2010 Ronald Reagan Media Award, is an author, radio-TV commentator and speaker on "The Politics of Sports Business." His book, "The Business and Politics of Sports, Second Edition" is available at bickley.com, Barnes and Noble or amazonkindle.
FRIDAY, 08 JULY 2011 07:52
http://www.newjerseynewsroom.com/professional/a-sports-faq-guide-to-nfl-and-nba-lockouts
BY EVAN WEINER
NEWJERSEYNEWSROOM.COM
THE BUSINESS AND POLITICS OF SPORTS
Sports lockouts should come with a frequently asked questions guide for the sports media and sports fans. You see whether it is the National Football League lockout or the National Basketball Association lockout they is a small impact on virtually every American taxpayer and those who a cable TV basic expanded tier subscribers.
There are some questions that need to be answered for everyone. For instance, why are cable TV subscribers underwriting sports owners lockout? The Walt Disney Company plans to pay the National Football League a rights fee whether the NFL plans a full schedule or misses some games. Will cable TV subscribers get any refunds or rebates from ESPN? The answer is no.
National and regional cable TV sports networks have a long history of not refunding subscribers for missed sports programming including the 1998-1999 National Basketball Association lockout. Don't expect any refunds from ESPN, Cablevision's Madison Square Garden Network for missed Knicks games or Comcast for missed Philadelphia 76ers games. Cablevision owns the Knicks and Comcast owns the 76ers.
There are numerous sports owners who either own regional cable TV networks outright like Comcast or pieces of cable TV regional sports networks. In Chicago, Comcast is partners with Jerry Reinsdorf's Chicago Bulls, Reinsdorf's White Sox, the Chicago Cubs ownership and Rocky Wirtz's Chicago Blackhawks in the city's regional sports network.
What kind of economic impact will the lockouts have?
Not as much as people think. A National Football League team has 10 home dates (Buffalo has eight or nine with one regular season game in Toronto depending on the season) while an NBA team might host on average about six games a month between the beginning of November and mid-April to complete a 41 game home schedule. There may be a couple of pre-season games and playoff games. But the overall economic impact is minimal.
Visiting teams don't bring a lot of fans with them to attend NBA games and a typical NBA team sends players, coaches, equipment guys and trainers along with broadcasters on the road. It is not a big traveling party and that means not many hotel rooms are needed and restaurants aren't making a living off of having NBA teams come through.
In 1998-99, Golden State Warriors owner Charles Cohan didn't want to pay rent at the Oakland Arena for missed games during the NBA lockout. The municipally owned arena operators took Cohan to arbitration where he lost. How many owners in both the NFL and NBA will attempt to withhold rent payments?
That should be a FAQ.
Some municipalities will lose some sales tax monies from ticket sales and concessions but municipalities have decided not to collect property taxes on arenas throughout the country. In New York, Philadelphia and in California, municipalities will be denied of the "Michael Jordan tax" and collect taxes from players who are in for a day playing.
Some businesses around arenas and stadiums will lose money and that has caught the attention of the Attorney General of the State of New York. Eric T. Schneiderman claims he is taking action acting on behalf of a handful of businesses and workers whose incomes are threatened if there are no Bills games in Orchard Park.
The Florham Park, N.J.-based New York Jets franchise, which plays games in East Rutherford, will not be holding training camp at Cortland State in central New York.
Schneiderman's office sent NFL Commissioner Roger Goodell a letter informing him that the state plans to investigate the NFL to see if the league, the 31 owners and Green Bay, has violated New York antitrust laws.
The letter overstates the real impact the NFL lockout has on businesses but Schneiderman is the first politician seeking to involve himself in the lockout. Schneider is looking out for hotels, retailers, the New York transportation system of buses and trains and cars and the per diem workers who could lose between nine and 12 days worth of work in Orchard Park and the couple of weeks of pre-season workouts a New York State universities in Cortland, Albany and Fredonia training facilities.
To quote Donald Trump, the economic impact is small potatoes. A few people will get hurt but the jobs Schneiderman is protecting are part time minimum wage positions at the stadiums and training camps.
Sports teams’ economic impact on a given area is always overstated. Also people are going to spend money on entertainment, they will just shift that football or basketball dollars elsewhere.
"The expected blow to the state's economy will be tremendous," wrote Assistant Attorney general Richard L. Schwartz. "Many New York public and private institutions depend heavily on the NFL training camp and regular season games to generate revenue."
A note to the assistant attorney general, Cortland State, doesn’t depend on whether the New York Jets training camp takes place at the campus’ main stadium. Mr. Schwartz might want to check the books of the college to see just how profitable or unprofitable having an NFL team on the premises is for the school. It might startle him and others in the Attorney General’s office to see the books at Cortland.
Ralph Wilson's Buffalo Bills gets about $7 million in subsidies for stadium maintenance and day of game operations.
The entity formally known as the National Football League Players Association put out a paper that contended that if there was no 2011 NFL season, that $160 million in local spending in each league city and 3,000 jobs would be wiped out. The NFLPA stance seems absolutely ludicrous given the fact that the league plays just 10 home games except in East Rutherford where the stadium houses two teams and stadium jobs are dead end per diem positions which would supplement someone's income.
The real money losers are the players and cable TV subscribers underwriting labor actions and not even knowing it.
If Schneiderman really wanted to conduct a thorough investigation, he would start with the television networks, Sumner Redstone's CBS, General Electric's NBC (now majority owned by Comcast), Rupert Murdoch's News Corp (FOX), the Walt Disney Company (ESPN) and DirecTV and ask why those entities are underwriting the owners costs in the lockout. Schneider can also check in with the NBA and see if Time Warner's Turner Sports and the Walt Disney Company's ESPN are underwriting the NBA lockout and investigate the Dolan family's Cablevision and ask if any fees that are being collected are going to the Knicks from the Madison Square Garden Network. He can also ask Goldman-Sachs and the New York Yankees owned YES Network about fees going to the New Jersey Nets.
That would just be a New York investigation. Similar inquiries could take place around the country.
Those are just a few FAQs that should be asked and answered. In the toy store of media, the sports department-writers, TV talking heads and radio talk show hosts are infuriated that their world has collided with the real world sort of - after all they want to be entertained with games and want no part of how sports really operates. If Schneiderman was truly serious about probing sports, there is a lot out there but his inquiry will be forgotten once the two sides in the NFL battle call a truce and reach an agreement.
Evan Weiner, the winner of the United States Sports Academy's 2010 Ronald Reagan Media Award, is an author, radio-TV commentator and speaker on "The Politics of Sports Business." His book, "The Business and Politics of Sports, Second Edition" is available at bickley.com, Barnes and Noble or amazonkindle.
Saturday, July 2, 2011
2011 NBA lockout can trace its roots back to 1983
FRIDAY, 01 JULY 2011 16:19
http://www.newjerseynewsroom.com/professional/2011-nba-lockout-can-trace-its-roots-back-to-1983
BY EVAN WEINER
NEWJERSEYNEWSROOM.COM
Dear National Basketball Association fans:
A couple of weeks ago LeBron James told you like it is in sports when he said, “All the people that were rooting on me to fail, at the end of the day they have to wake up tomorrow and have the same life that they had before they woke up today. They have the same personal problems they had today. I'm going to continue to live the way I want to live and continue to do the things that I want to do with me and my family and be happy with that. So they can get a few days or a few months or whatever the case may be on being happy about not only myself, but the Miami Heat not accomplishing their goal. But they got to get back to the real world at some point.”
James apologized for his statement even though what he said was true. But his rant was just the prelude to the next moment of truth in the world of a sports fan, an NBA fan. The owners and players don’t care if you offer unconditional loyalty to a logo or, as Jerry Seinfeld aptly says, dirty laundry. The NBA – and all sports -- are big business and if the NBA owners have to lock out the players to get a better deal, so be it.
The NBA is in a lockout mode. There will be teeth gnashing about greedy owners and greedy players but one day fans will have to be broken from their unconditional love, the face painting of colors, the tattoo team logo proudly displayed on some part of the body, the shirts, hats and realize that sports is nothing more than a business.
NBA fans really have not lost anything yet. Sure the rookie leagues have been cancelled and free agency is being delayed but there are still more than three months to go before the product disappears from the shelf -- pre-season games.
There is a question about the finances of the NBA. Commissioner David Stern, the owners’ front man, wants hundreds of millions of dollars in worker givebacks so that the league can be financially viable. Twenty-eight years ago, Commissioner Larry O’Brien was looking for givebacks to make the then 23-team league financially viable.
These were desperate time for the league, so much so that the owners of Madison Square Garden, Gulf and Western, somehow convinced New York City Mayor Ed Koch that the Gulf and Western’s subsidiary -- Madison Square Garden and the two franchises, the NBA Knicks and the National Hockey League Rangers -- could not compete with San Diego, Indiana, Cleveland, Salt Lake City for basketball players and Winnipeg, Hartford, Quebec City, Edmonton, Calgary along with Denver for hockey players.
Without property tax relief, Gulf and Western would relocate the Knicks to Nassau County and the Rangers to the Meadowlands. Gulf and Western never did like Madison Square Garden all that much and within four years of the building’s reopening in 1972, the company was considering moving both teams to an arena that would be built in East Rutherford.
Gulf and Western got the property tax break that the Dolan family, the Garden’s current owners, presently enjoys.
Despite the fact that both Larry Bird in Boston and Magic Johnson in Los Angeles were winning titles and a strong presence in Philadelphia where the old ABA star Julius Erving had won a title, the NBA was at the crossroads in 1983.
A good many franchises were losing money, the Collective Bargaining Agreement was up and the 23 team NBA was thinking of cutting as many as seven teams with Cleveland, Denver, Indiana, Kansas City, San Diego and Utah losing an enormous amount of money. Some teams fell behind on their deferred payments, estimated to be between $80 million and $90 million, which nearly prompted a player’s strike in 1982. There were rumors that Denver and Utah were going to consolidate into one franchise and that other teams would move. Donald Sterling moved the San Diego Clippers to Los Angeles following the 1983-84 season without the NBA's permission. The Kansas City Kings, a franchise that tried to regionalize itself in the 1970s by splitting home games between Kansas City and Omaha after leaving Cincinnati in 1972, went west to Sacramento in 1984-85. Utah attempted to solve some of its financial problems by playing a number of home games in Las Vegas.
The players and owners met for nine months and completely rewrote the Collective Bargaining Agreement from its foundations. The league opened its books and let the players see what the profits and losses really were and a deal was brokered.
“I think it just had a number of important consequences,” said NBA Deputy Commissioner Russell Granik who was part of the NBA management and negotiating team in 1983. “One, by having rolling around in that stuff, for the first time, I think that process in the nine months or the year of negotiations, was that the players for the first time got complete financial information. Everybody knew everything.
“That really, I think, sort of created a feeling of we are in this together as a partnership that maybe hadn’t existed between the players and the league. I think that was a great boast. The other thing by having the salary cap and the revenue sharing system in place, we were able to go out and attract new ownership in places that up until then we were struggling.”
Two franchises that were struggling were the Cleveland Cavaliers and the Indiana Pacers. All together the league might have been left with just 16 teams without the new bargaining agreement.
“I believe Gordon and George Gund at the time would not have purchased the Cleveland Cavaliers shortly thereafter except we had this deal. At that point Indiana was really struggling. Shortly after that Herb and Mel Simon purchased the team in Indiana. Both are still in the league (in 2001) many years later. Two of the strongest ownership groups we had. I think there were others that followed thereafter that probably would not have happened if we hadn’t been able to say OK I think we got a system that’s going to make sense.
“At the time we were very serious and I think Larry (Fleischer) and the players, you know your first reaction is they are bluffing, but again having been in the process and learn all the numbers, we were seriously thinking of at least right away folding two or three times, buying them back or merging them or something. I don’t have any doubt but for that kind of deal that would have happened as well,” said Granik. The 1983 Collective Bargaining Agreement that put a salary cap in place is considered to be the turning point in the league's history by the owners and by the players. The 23-team league survived and both sides formed a working alliance, which would allow the league to grow. It also helped that two entities were about ready to join the league, Michael Jordan and Nike. The salary cap was the brainchild of a new lawyer that came on the scene named Gary Bettman. Bettman would become one of the three key people that would run the NBA in the mid-1980s and beyond. David Stern would be the boss, Granik the No. 2 guy, followed by Bettman.
The Collective Bargaining was Commissioner Larry O’Brien’s last major work for the NBA.
O’Brien was in a sense a transitional commissioner. The NBA was a business under his predecessor Walter Kennedy, but under O’Brien it became a bigger business. O’Brien replaced Kennedy in 1975 and guided the NBA in the league’s “merger” with the ABA. O’Brien was the lead negotiator in two Collective Bargaining Agreements in 1976 and 1983. During O’Brien, gate receipts doubled and TV revenues increased by threefold. Still O’Brien was unable to financially stabilize the league and without the 1983 labor agreement, which established a partnership with the Players Association and its Executive Director Larry Fleischer, the NBA might have contracted franchises.
The 1983 agreement propelled the league into a better financial position.
Or did it? Kansas City ownership sold the franchise to a Sacramento group. Twenty-eight years later, Sacramento is in dire fiscal shape. Indiana remains a troubled franchise. The league over the years added teams; Charlotte was an initial success but eventually moved. Vancouver lasted just six years before the owner Michael Heisley uprooted the franchise and placed it in Memphis. A second Charlotte franchise has not been financially successful. The second New Orleans franchise is on the financial ropes. Seattle no longer has a team.
Cost certainty is fleeting. The owners and players celebrated in 1983 a new deal. In retrospect, it didn’t work for everyone.
David Stern replaced O'Brien as commissioner on February 1, 1984. Stern was an attorney who had been the NBA's Executive Vice President. Stern would direct a tremendous expansion in the marketing of the NBA and develop a cohesive and profitable broadcasting strategy. He would move try to ensure the stability of NBA franchises by increasing licensing revenues, and developing corporate sponsorships.
In the buildup to the potential NBA lockout of 1998, NBC and TNT guaranteed owners that they would pay out $465 million dollars for broadcast rights whether the league played a game or not. The NBA had been very good to NBC and TNT in 1997-98 as they shared $400 million in profits from TV. Those two items did not go unnoticed by the National Basketball Players Association.
The players promised that it would boycott interviews with NBC and TNT personnel because the association’s leadership felt the networks were bankrolling the lockout and provided a guarantee of money against losses if no basketball was being played. Phoenix Suns CEO Jerry Colangelo disputed that saying television had no influence on the lockout and that owners were merely seeking a better collective bargaining agreement.
Each owner would get more than $15 million from the NBC and TNT and more from local cable contracts. Cable consumers would help pay for the lockout unknowingly. Cable consumers did not receive any rebates from games missed because of work stoppages in Major League Baseball in 1994 and 1995 and in the National Hockey League in 1994-95.
On March 23, 1998 NBA owners voted to reopen the talks because the players’ share of the revenues exceeded 57 percent. The league shut down operations on July 1, 1998 and both sides dug in. The owners had a nest egg and could afford to wait until the players caved. The television unit of General Electric, the National Broadcasting Company and Ted Turner’s Turner Sports agreed to pay the owners a rights fee even though there was a possibility that games would be cancelled. If the games were cancelled, NBC would get money back either in a form or a rebate of a reduced rights fee schedule in the final three years of the TV agreement while Turner would have the contract extended by a year.
A few players boycotted NBC TV interviews whether they were on a national or a local affiliate level but TV interviews with NBC or CNN (TNT’s sister network) were of little concern.
The players sat for 202 days. In the end, the owners kept the salary cap, keep the draft and got a ceiling on top salaries at $14 million and a limit on how many years a team could pay a player at the $14 million level at seven. There was always a rookie minimum salary and stiffer drug testing policies. The middle class NBA player got more money; the stars were capped. David Stern had turned the middle class player against the stars in the fight and won the battle and the war.
The NBA got cost certainty in 1999 but not everyone made out. Charlotte and Vancouver quickly became former NBA cities. In 2005, the NBA and the players cut yet another cost certainty deal. Seattle didn’t make it and Sacramento ownership seriously considered moving to Anaheim this past spring.
The business of the NBA will go on despite a lockout. Anaheim will continue to push to get the Maloof brothers’ Sacramento Kings. Louisville may want in once the dust settles. San Jose and Newark will be buyers as well. Meanwhile the fans take another one on the chin. But they will be back … well some of them in the arena if they can afford the price of the tickets. If not, the corporate crowd will go to a game and treat it as an event and the real fans can stay home and watch it on TV.
LeBron told it like it is and he was vilified for that. David Stern, Players Executive Director Billy Hunter and others won’t be as blunt. The NBA is a business and the two sides will eventually settle this dispute without any worry about the fans.
Evan Weiner, the winner of the United States Sports Academy's 2010 Ronald Reagan Media Award, is an author, radio-TV commentator and speaker on "The Politics of Sports Business." His book, "The Business and Politics of Sports, Second Edition" is available at bickley.com, Barnes and Noble or amazonkindle.
FRIDAY, 01 JULY 2011 16:19
http://www.newjerseynewsroom.com/professional/2011-nba-lockout-can-trace-its-roots-back-to-1983
BY EVAN WEINER
NEWJERSEYNEWSROOM.COM
Dear National Basketball Association fans:
A couple of weeks ago LeBron James told you like it is in sports when he said, “All the people that were rooting on me to fail, at the end of the day they have to wake up tomorrow and have the same life that they had before they woke up today. They have the same personal problems they had today. I'm going to continue to live the way I want to live and continue to do the things that I want to do with me and my family and be happy with that. So they can get a few days or a few months or whatever the case may be on being happy about not only myself, but the Miami Heat not accomplishing their goal. But they got to get back to the real world at some point.”
James apologized for his statement even though what he said was true. But his rant was just the prelude to the next moment of truth in the world of a sports fan, an NBA fan. The owners and players don’t care if you offer unconditional loyalty to a logo or, as Jerry Seinfeld aptly says, dirty laundry. The NBA – and all sports -- are big business and if the NBA owners have to lock out the players to get a better deal, so be it.
The NBA is in a lockout mode. There will be teeth gnashing about greedy owners and greedy players but one day fans will have to be broken from their unconditional love, the face painting of colors, the tattoo team logo proudly displayed on some part of the body, the shirts, hats and realize that sports is nothing more than a business.
NBA fans really have not lost anything yet. Sure the rookie leagues have been cancelled and free agency is being delayed but there are still more than three months to go before the product disappears from the shelf -- pre-season games.
There is a question about the finances of the NBA. Commissioner David Stern, the owners’ front man, wants hundreds of millions of dollars in worker givebacks so that the league can be financially viable. Twenty-eight years ago, Commissioner Larry O’Brien was looking for givebacks to make the then 23-team league financially viable.
These were desperate time for the league, so much so that the owners of Madison Square Garden, Gulf and Western, somehow convinced New York City Mayor Ed Koch that the Gulf and Western’s subsidiary -- Madison Square Garden and the two franchises, the NBA Knicks and the National Hockey League Rangers -- could not compete with San Diego, Indiana, Cleveland, Salt Lake City for basketball players and Winnipeg, Hartford, Quebec City, Edmonton, Calgary along with Denver for hockey players.
Without property tax relief, Gulf and Western would relocate the Knicks to Nassau County and the Rangers to the Meadowlands. Gulf and Western never did like Madison Square Garden all that much and within four years of the building’s reopening in 1972, the company was considering moving both teams to an arena that would be built in East Rutherford.
Gulf and Western got the property tax break that the Dolan family, the Garden’s current owners, presently enjoys.
Despite the fact that both Larry Bird in Boston and Magic Johnson in Los Angeles were winning titles and a strong presence in Philadelphia where the old ABA star Julius Erving had won a title, the NBA was at the crossroads in 1983.
A good many franchises were losing money, the Collective Bargaining Agreement was up and the 23 team NBA was thinking of cutting as many as seven teams with Cleveland, Denver, Indiana, Kansas City, San Diego and Utah losing an enormous amount of money. Some teams fell behind on their deferred payments, estimated to be between $80 million and $90 million, which nearly prompted a player’s strike in 1982. There were rumors that Denver and Utah were going to consolidate into one franchise and that other teams would move. Donald Sterling moved the San Diego Clippers to Los Angeles following the 1983-84 season without the NBA's permission. The Kansas City Kings, a franchise that tried to regionalize itself in the 1970s by splitting home games between Kansas City and Omaha after leaving Cincinnati in 1972, went west to Sacramento in 1984-85. Utah attempted to solve some of its financial problems by playing a number of home games in Las Vegas.
The players and owners met for nine months and completely rewrote the Collective Bargaining Agreement from its foundations. The league opened its books and let the players see what the profits and losses really were and a deal was brokered.
“I think it just had a number of important consequences,” said NBA Deputy Commissioner Russell Granik who was part of the NBA management and negotiating team in 1983. “One, by having rolling around in that stuff, for the first time, I think that process in the nine months or the year of negotiations, was that the players for the first time got complete financial information. Everybody knew everything.
“That really, I think, sort of created a feeling of we are in this together as a partnership that maybe hadn’t existed between the players and the league. I think that was a great boast. The other thing by having the salary cap and the revenue sharing system in place, we were able to go out and attract new ownership in places that up until then we were struggling.”
Two franchises that were struggling were the Cleveland Cavaliers and the Indiana Pacers. All together the league might have been left with just 16 teams without the new bargaining agreement.
“I believe Gordon and George Gund at the time would not have purchased the Cleveland Cavaliers shortly thereafter except we had this deal. At that point Indiana was really struggling. Shortly after that Herb and Mel Simon purchased the team in Indiana. Both are still in the league (in 2001) many years later. Two of the strongest ownership groups we had. I think there were others that followed thereafter that probably would not have happened if we hadn’t been able to say OK I think we got a system that’s going to make sense.
“At the time we were very serious and I think Larry (Fleischer) and the players, you know your first reaction is they are bluffing, but again having been in the process and learn all the numbers, we were seriously thinking of at least right away folding two or three times, buying them back or merging them or something. I don’t have any doubt but for that kind of deal that would have happened as well,” said Granik. The 1983 Collective Bargaining Agreement that put a salary cap in place is considered to be the turning point in the league's history by the owners and by the players. The 23-team league survived and both sides formed a working alliance, which would allow the league to grow. It also helped that two entities were about ready to join the league, Michael Jordan and Nike. The salary cap was the brainchild of a new lawyer that came on the scene named Gary Bettman. Bettman would become one of the three key people that would run the NBA in the mid-1980s and beyond. David Stern would be the boss, Granik the No. 2 guy, followed by Bettman.
The Collective Bargaining was Commissioner Larry O’Brien’s last major work for the NBA.
O’Brien was in a sense a transitional commissioner. The NBA was a business under his predecessor Walter Kennedy, but under O’Brien it became a bigger business. O’Brien replaced Kennedy in 1975 and guided the NBA in the league’s “merger” with the ABA. O’Brien was the lead negotiator in two Collective Bargaining Agreements in 1976 and 1983. During O’Brien, gate receipts doubled and TV revenues increased by threefold. Still O’Brien was unable to financially stabilize the league and without the 1983 labor agreement, which established a partnership with the Players Association and its Executive Director Larry Fleischer, the NBA might have contracted franchises.
The 1983 agreement propelled the league into a better financial position.
Or did it? Kansas City ownership sold the franchise to a Sacramento group. Twenty-eight years later, Sacramento is in dire fiscal shape. Indiana remains a troubled franchise. The league over the years added teams; Charlotte was an initial success but eventually moved. Vancouver lasted just six years before the owner Michael Heisley uprooted the franchise and placed it in Memphis. A second Charlotte franchise has not been financially successful. The second New Orleans franchise is on the financial ropes. Seattle no longer has a team.
Cost certainty is fleeting. The owners and players celebrated in 1983 a new deal. In retrospect, it didn’t work for everyone.
David Stern replaced O'Brien as commissioner on February 1, 1984. Stern was an attorney who had been the NBA's Executive Vice President. Stern would direct a tremendous expansion in the marketing of the NBA and develop a cohesive and profitable broadcasting strategy. He would move try to ensure the stability of NBA franchises by increasing licensing revenues, and developing corporate sponsorships.
In the buildup to the potential NBA lockout of 1998, NBC and TNT guaranteed owners that they would pay out $465 million dollars for broadcast rights whether the league played a game or not. The NBA had been very good to NBC and TNT in 1997-98 as they shared $400 million in profits from TV. Those two items did not go unnoticed by the National Basketball Players Association.
The players promised that it would boycott interviews with NBC and TNT personnel because the association’s leadership felt the networks were bankrolling the lockout and provided a guarantee of money against losses if no basketball was being played. Phoenix Suns CEO Jerry Colangelo disputed that saying television had no influence on the lockout and that owners were merely seeking a better collective bargaining agreement.
Each owner would get more than $15 million from the NBC and TNT and more from local cable contracts. Cable consumers would help pay for the lockout unknowingly. Cable consumers did not receive any rebates from games missed because of work stoppages in Major League Baseball in 1994 and 1995 and in the National Hockey League in 1994-95.
On March 23, 1998 NBA owners voted to reopen the talks because the players’ share of the revenues exceeded 57 percent. The league shut down operations on July 1, 1998 and both sides dug in. The owners had a nest egg and could afford to wait until the players caved. The television unit of General Electric, the National Broadcasting Company and Ted Turner’s Turner Sports agreed to pay the owners a rights fee even though there was a possibility that games would be cancelled. If the games were cancelled, NBC would get money back either in a form or a rebate of a reduced rights fee schedule in the final three years of the TV agreement while Turner would have the contract extended by a year.
A few players boycotted NBC TV interviews whether they were on a national or a local affiliate level but TV interviews with NBC or CNN (TNT’s sister network) were of little concern.
The players sat for 202 days. In the end, the owners kept the salary cap, keep the draft and got a ceiling on top salaries at $14 million and a limit on how many years a team could pay a player at the $14 million level at seven. There was always a rookie minimum salary and stiffer drug testing policies. The middle class NBA player got more money; the stars were capped. David Stern had turned the middle class player against the stars in the fight and won the battle and the war.
The NBA got cost certainty in 1999 but not everyone made out. Charlotte and Vancouver quickly became former NBA cities. In 2005, the NBA and the players cut yet another cost certainty deal. Seattle didn’t make it and Sacramento ownership seriously considered moving to Anaheim this past spring.
The business of the NBA will go on despite a lockout. Anaheim will continue to push to get the Maloof brothers’ Sacramento Kings. Louisville may want in once the dust settles. San Jose and Newark will be buyers as well. Meanwhile the fans take another one on the chin. But they will be back … well some of them in the arena if they can afford the price of the tickets. If not, the corporate crowd will go to a game and treat it as an event and the real fans can stay home and watch it on TV.
LeBron told it like it is and he was vilified for that. David Stern, Players Executive Director Billy Hunter and others won’t be as blunt. The NBA is a business and the two sides will eventually settle this dispute without any worry about the fans.
Evan Weiner, the winner of the United States Sports Academy's 2010 Ronald Reagan Media Award, is an author, radio-TV commentator and speaker on "The Politics of Sports Business." His book, "The Business and Politics of Sports, Second Edition" is available at bickley.com, Barnes and Noble or amazonkindle.
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